Villone, who returned Thursday from a 12-day vacation in Italy, spoke with his agent, Scott Boras, before making his decision. Villone has drawn interest from five or six teams, several of which may be willing to give the reliever a two-year contract.
"To decline it was the best option I had," Villone said in a telephone interview. "Closing my doors too quickly on a possible multi-year deal didn't make sense."
Villone, who turns 37 in January, went 3-3 with a 5.04 ERA in 2006, his first season with the Yankees. A native of Upper Saddle River, N.J., Villone enjoyed playing so close to home.
"I love New York and want to play there again, but I'm not going to shut the door on playing someplace else," Villone said. "At this stage of my career, I have to do what's best for my family."
Villone contemplated accepting the arbitration offer, but with the new Collective Bargaining Agreement rules which allow a free agent to re-sign at any time regardless of whether he accepts or declines arbitration, Villone decided to keep his options open.
"If you're asking me today, New York is the only place I'd consider a one-year deal," Villone said. "But a two-year deal is still my preference."
Villone had an impressive first half last year, posting a 2.27 ERA and holding opposing hitters to a .201 average in 36 appearances. He struggled after the All-Star break, as hitters batted .301 against him and his ERA in 34 outings was 8.35.
Boras dined with general manager Brian Cashman on Wednesday night, with Villone's future among the topics of discussion. Villone told Boras he didn't want to hear the status of his conversations with any teams until there were solid offers on the table.
"I try to keep things simple for myself," Villone said. "It's easier that way."
Mark Feinsand is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.