New York came to terms on a one-year, $2 million contract with right-hander Octavio Dotel, who missed most of last season after undergoing Tommy John elbow surgery.
The deal, which is contingent on a physical, includes incentive clauses which could earn Dotel up to $3 million more.
"I feel very happy with this contract," Dotel told The Associated Press. "This team has a lot of tradition, and it pleases me to know that they want me to pitch for them."
Dotel joins Kyle Farnsworth, Ron Villone and Mike Myers as the new pieces in the bullpen, as the Yankees try to strengthen the bridge to closer Mariano Rivera.
The Yanks had plenty of competition for Dotel, as the Mets, Indians and Red Sox also made a push for the 32-year-old, who appeared in 15 games for Oakland last season before undergoing elbow surgery.
Dotel has experience as a closer, saving 36 games for Houston and Oakland in 2004. He entered last season as the A's closer, but he blew four of his 11 opportunities before ending his season with the elbow injury.
This is not the first time that the Yankees signed a pitcher coming off Tommy John surgery. In 2003, New York signed Jon Lieber, a move which paid off with a 14-win season in 2004 after he had fully rehabbed.
Dotel believes he will be able to pitch in April, though one Yankees official said it could take until May or June for the reliever to be at full strength.
The Yankees now have an overloaded pitching staff, with Randy Johnson, Mike Mussina, Carl Pavano, Chien-Ming Wang, Shawn Chacon, Aaron Small and Jaret Wright as potential starters and Rivera, Farnsworth, Dotel, Villone, Myers and Tanyon Sturtze in the bullpen.
The addition of Dotel gives the Yankees the ability to deal a pitcher, or simply protect themselves against an injury to one of the other 12 pitchers.
Mark Feinsand is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.