The Mexico international paid the Eredivisie giant a visit on Monday to undergo a medical and will sign a contract with PSV until June 2023 once the Confederations Cup is over.
"PSV and Pachuca have agreed terms over the transfer of Mexico international Hirving Lozano," a statement on the club's official website reads.
"Lozano travelled to Netherlands on Monday with permission from the Mexican football association to undergo a medical.
"He has verbally agreed to a contract until 2023 and will put pen to paper once he returns from the Confederations Cup."
Lozano, 21, had also been linked with clubs such as Manchester City and Benfica in recent weeks, but he has now decided to continue his career at PSV.
The winger becomes the second Mexican at the club, joining experienced midfielder Andres Guardado at the Philips Stadion, with fellow compatriot Hector Moreno having just left the club for Roma.