Speedcafe.com sources have confirmed newspaper reports today that the 23-year-old will join the Queensland-based Ford squad.
The team's interest in the young star has been public since April, prior to Volvo's announcement that it would withdraw its factory support from Garry Rogers Motorsport at season's end.
McLaughlin's move locks in the biggest piece of the 2017 Supercars silly season puzzle just six events into the current year.
Team owner Roger Penske confirmed to Speedcafe.com in May that his squad will not expand to a third car next year, as had initially been rumoured.
The 26-year-old Pye has been with the team since 2014 and stepped in to replace Marcos Ambrose last year, saving the squad's season as a single-car operation.