Phelps, 28, appeared in 32 games (17 starts) for the Yankees last season with a 4.38 ERA. He was traded to Miami alongside utility man Martin Prado in December in exchange for right-hander Nathan Eovaldi and outfielder Garrett Jones.
The Marlins have won both of their arbitration hearings this offseason. They also won the case against right-hander Mat Latos.
Jamal Collier is a reporter for MLB.com. Follow him on Twitter at @jamalcollier. This story was not subject to the approval of Major League Baseball or its clubs.