Several reports had indicated that Torre would take the fall after the Yankees' second consecutive first-round exit from the postseason, which occurred Saturday when New York lost to Detroit in the American League Division Series.
But Steinbrenner decided to retain the manager after spending two days holed up in a Manhattan hotel, listening to many of his trusted baseball lieutenants. Shortly before Torre's press conference, Steinbrenner called Brian Cashman to tell him his decision, and the general manager handed the phone to Torre, who was then informed of his fate.
"I spoke to Joe Torre today and I told him, 'You're back for the year,'" Steinbrenner said in a statement released by his publicist, Howard Rubenstein. "'I expect a great deal from you and the entire team. I have high expectations and I want to see enthusiasm, a fighting spirit and a team that works together. The responsibility is yours, Joe, and all of the Yankees.'
"Yes, I am deeply disappointed about our loss this year; we have to do better. And I deeply want a championship. It's about time."
"I think Joe Torre is the right man for this team next year; I certainly voiced that and discussed that with him over the phone," Cashman said. "You want to have a manager that has the support and belief from above -- and you can't get any higher than the Boss. It wouldn't work otherwise."
Torre has led the Yankees to the postseason in each of his 11 seasons as manager, winning 10 American League East titles. Torre's teams have won four World Series rings and six AL pennants, but New York has not won it all since 2000.
Each of the past two years ended in disappointing Division Series losses, prompting the speculation that Torre would be replaced by Lou Piniella, a former Cincinnati, Seattle and Tampa Bay manager, who also was a player, manager and general manager for the Yankees and Steinbrenner, with whom he has a long-standing relationship.
"Knowing what this organization expects from its people, especially its manager," Torre said, "it's something that on the heels of not being able to get through the first round, it's just something that you understand goes with the territory.
"Unfortunately, this year ended all too abruptly, but the season itself was very gratifying for me," added Torre, who led the Yankees to 97 wins and baseball's best record. "I'm glad I get a chance to do it again."
Cashman is one of the people who lobbied on Torre's behalf, making a recommendation to Steinbrenner that the manager return for 2007. It has also been reported that Derek Jeter called the Boss to lend his support to Torre.
"When you work here, you have to understand that every year may be your last year."
-- Joe Torre
"This team played hard all year for Joe Torre," Cashman said. "We got beat -- and we got beat pretty handily ... but I don't think you can make judgments in three days. We played our worst ball at the worst time, unfortunately."
"We go to Spring Training every year [and] we talk about getting to the World Series," Torre said. "We don't talk about having a good year [or having] a good record and all that stuff; it's getting to the World Series.
"With the danger of failing is the elation of winning. This is what we deal with on a regular basis."
Torre spoke with Steinbrenner on Monday for about 15-20 minutes, as the two discussed the team and the manager's status for 2007. Torre told Steinbrenner, "If you feel in your heart that a change has to be made, go ahead and do it."
"I knew he was trying to figure out what he wanted to do," Torre said. "I think George Steinbrenner needed to talk to me before he made any decisions."
Torre refused to reveal any details of his conversation with Steinbrenner, but he feels that their relationship will not suffer as a result of the past 72 hours.
"Let's just say that he echoed support and commitment to having me go on in this job," Torre said. "I felt comfortable with the conversation. As far as what was said, we'll leave that between us."
This marked the second consecutive year in which Torre's fate has been up in the air following the postseason, though last October it was Torre who was deciding whether to return for his 11th year on the bench.
The relationship between Torre and Steinbrenner had become strained, and the manager was not sure that he wanted to come back for another season of in-fighting within the organization.
"Last year when I walked away, I didn't have a lot of fun during the course of the year; I didn't know what I wanted to do," Torre said. "In a way, it was sort of my decision. This year, it never entered my mind that I didn't want to do this."
Torre's wife, Ali, who attended the press conference with him on Tuesday, agreed that last fall's situation was much harder on her husband.
"Last year was more difficult, because it really had to do with what Joe was going through personally," she said. "This year was disappointing, but I'm proud of what he's accomplished so far. I think George is smart; he's a wise man. He knows he has a good leader. It's understandable that he was angry and upset, because everyone was.
"It's more fun to win. When you don't win, there's drama. I'm happy that things are settled."
Some of Torre's players were happy to hear that their manager would be returning next season.
"I'm happy he's coming back because I think he can do the job better than anybody else," Scott Proctor said. "He's done a great job; you can't hold him solely accountable for the playoff collapse."
"I always wanted to think that Joe would come back next year," Hideki Matsui said. "In my mind, Joe is a member of the New York Yankees."
"It's good this saga is done, so let's move on and get ready to win a championship next season," Mike Myers said. "I'm glad he's back."
Torre has one year and $7 million remaining on his contract, but he refused to rule out returning to the Yankees beyond 2007.
"When you work here, you have to understand that every year may be your last year," Torre said. "Ali doesn't believe me when I say next year may be enough, but I don't know, either. I'll hopefully feel as enthused as I have this year and play it out as long as it feels good."