The two sides agreed to terms on Tuesday night, after the Yankees increased their offer from $48 million to $52 million. The deal, which was confirmed by a Yankees official, is contingent on Damon passing a physical.
Damon also confirmed the agreement in an interview with WBZ-TV in Boston, citing the Yankees' aggressiveness as a major factor in his decision to move from Fenway Park to Yankee Stadium.
"We know George Steinbrenner's reputation; he always wants to have the best players and I think he showed that tonight," Damon told WBZ. "He and Brian Cashman came after me hard and now I'm part of the Yankees and that great lineup. We're going to be a tough team to beat."
Although Cashman had maintained his position that Bubba Crosby would be the team's starting center fielder, it was assumed that the Yankees would make a move before Spring Training began in mid-February. After watching other teams -- most notably the Mets, Red Sox and Blue Jays -- make big splashes this winter, the Yankees finally landed their big fish.
Cashman, who could not be reached for comment on Tuesday, has been focused on improving the bullpen and finding an upgrade in center field throughout the offseason.
After adding Kyle Farnsworth, Mike Myers and Ron Villone to the bullpen, the Yankees came to a one-year, $2 million agreement with Octavio Dotel on Tuesday, finishing up the work on the relief corps. Then the Yankees came to terms with Damon, stunning the baseball world.
Although Damon will make $13 million per year over the next four years, it won't cause the Yankees' payroll to rise significantly, as Bernie Williams made about $12.3 million to play center last season. Williams will likely return as a bench player, as the Yankees are close to signing him to a one-year, $1.5 million deal.
Damon gives the Yankees their first true leadoff hitter since Chuck Knoblauch left after the 2001 season. New York used Derek Jeter in that spot for much of last season, but the Yankees' captain can now move back to his traditional No. 2 position in the batting order.
One of Damon's new teammates, Alex Rodriguez, said recently that he considered Damon to be one of the two best leadoff hitters in the game, along with Seattle's Ichiro Suzuki. Damon agreed with that assessment.
"They haven't had a championship since Chuck Knoblauch was there when they had a great leadoff hitter," Damon said. "I think the leadoff role has been under-appreciated. A good leadoff hitter is tough to find and I think New York just found the best leadoff hitter in the game."
Damon's agent, Scott Boras, had been looking for a seven-year deal for Damon, who was the top center fielder available on the free-agent market. But at the age of 32, it was unlikely that any team would make such a commitment to Damon.
Once he was willing to come down to a four-year deal, it became a matter of which team would step up with the best offer. Boston never moved from its original offer of $40 million, opening the door for the Yankees to steal him away from their rivals.
"I made contact with them and told [Boston manager Terry Francona] they really need to get going because if not, I'm going to be another team," Damon said. "Unfortunately, Boston had their plans. I'm not sure if they knew I meant it but now I'm a Yankee and hopefully they can go off and get the other center fielders they've been courting for the past month or so."
Apparently, Damon's goals changed over the past eight months, as he told MLB.com in early May that money would not be the determining factor in his decision.
"There's no way I can go play for the Yankees, but I know they're going to come after me hard," he said on May 3. "It's definitely not the most important thing to go out there for the top dollar, which the Yankees are going to offer me. It's not what I need."
Yet sometime in the next week, Damon will don the pinstripes and a Yankees cap at the Stadium, smiling proudly while flashbulbs pop all around him.
Damon, who was one of the major players in Boston's 2004 championship run, is well-known for his long hair and beard, but he knows that by taking the Yankees' money, those will both have to go.
"Without a doubt, George Steinbrenner has a policy and I'm going to stick to it," Damon said. "Our policy with the Yankees is to go out there and win and we're going to try and bring another championship to them."
Mark Feinsand is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.