The contract, which could be announced as early as Tuesday, is worth between $11 million and $12 million total -- or, on average, slightly under $4 million per season -- according to an industry source.
The signings are part of new executive vice president Dan Duquette's plan to expand the club's reach worldwide -- Chen would become the first Taiwan native to play for the Orioles, and Chong would have been the first Korean.
The Baltimore Sun first reported that the Orioles had serious interest in Chen as early as November, but Duquette downplayed the negotiations, saying during Wada's introductory news conference in December that he didn't know much about Chen. Duquette does not talk about signings until they are official.
But Chen apparently was near the top of the Orioles' radar since the club scouted him in Japan in September, knowing he likely would be coming to the United States as a free agent. Because he was considered a foreign player, Chen negotiated the length of his contract in Japan's Nippon Baseball League and was not subject to the posting process.
A 6-foot, 180-pound lefty who uses four pitches including a low-90s fastball and a mid-80s slider, Chen was 8-10 with a 2.68 ERA, 31 walks and 94 strikeouts in 164 2/3 innings last year for the Chunichi Dragons. In his pro career, Chen is 36-30 with a 2.59 ERA and has struck out 520 batters while walking 159 in 650 2/3 innings. He led Japan's Central League in ERA in 2009 with a 1.54 mark.
He is expected to join a crowded rotation that potentially includes four other left-handers -- Wada, Zach Britton, Brian Matusz and Dana Eveland -- and right-handers Jeremy Guthrie, Tommy Hunter and Jake Arrieta, among others.
Eveland and possibly Wada could be moved to the bullpen while Matusz and Britton might have to battle for their rotation spots. Since he took over as manager in 2010, Buck Showalter has said he wanted to create an atmosphere in Baltimore where players have to fight to make the big league roster. That may be the case with this year's rotation if the Orioles don't trade any of their current starters.
When the Orioles announce the Chen signing, they'll have to remove someone from their currently filled 40-man roster.