Andy Pettitte and the Yankees reached a one-year, $16 million agreement on Friday, adding the left-hander to New York's rotation for 2007.
The contract also includes a player option for 2008, also worth $16 million.
"We have preliminarily agreed to terms with Andy Pettitte on a contract to pitch for the New York Yankees, pending the passing of a physical examination," general manager Brian Cashman said in a statement. "At this time, I will have no further comment."
Pettitte joins a rotation which includes Chien-Ming Wang, Mike Mussina, Randy Johnson and Carl Pavano. The Yankees also have the negotiating rights to Japanese left-hander Kei Igawa, who would likely battle Pavano for the final spot in the rotation if he signs.
"I think it's exciting," Mussina said. "We all know he can pitch here; he had great success here. It will be good to have him back."
Houston had been offering Pettitte a one-year, $12 million deal, and had apparently decided not to go higher than that for the left-hander. Thursday, it appeared that the Astros had a trade in place with the White Sox to land Jon Garland, a sign that they had decided to move on without Pettitte. The trade with Chicago fell through, but the message had been sent.
"We told the Astros we would do the same deal at $14 million," Randy Hendricks, Pettitte's agent, said in an e-mail. "They have been stuck on $12 million and essentially said take it or leave it. The aborted Garland trade proves they had no intention of increasing their offer. So there was nothing more to wait for except a decision by Andy, which he made this afternoon."
Pettitte just completed a three-year, $31.5 million contract with Houston, going 37-26 with a 3.38 ERA for the Astros. Pettitte spent the first nine seasons of his career with the Yankees, going 149-78 in the regular-season and four World Series rings.
Pettitte went 14-13 with a 4.20 ERA in 2006, leading the Majors with 35 starts. Pettitte threw 214 1/3 innings, the second consecutive season in which he has topped the 200-inning mark.
After a poor first half in which he want 7-9 with a 5.28 ERA, Pettitte went 7-4 with a 2.80 after the All-Star break last season.
"It's been a brutal several days trying to come to this decision," Pettitte told KRIV-TV in Houston. "It's been extremely difficult. That's really all I can say right now.
"It's been an emotional day. It's been an emotional couple of days. Tomorrow I am going to try and set something up and get everybody [in the media] together, and we will talk about everything, and maybe I can be thinking a little clearer than I am right now."
Pettitte will be addressing the media on Saturday at 11:30 a.m. ET in Houston.
The addition of Pettitte will also begin the speculation that Roger Clemens could join him back in the Bronx later this season.
"Way too early to tell," Hendricks said.
Clemens and Pettitte have been teammates since 1999, playing five years together in New York and the last three in Houston. Clemens has a 10-year personal services contract with the Astros waiting for him when he retires, but the idea of pitching with Pettitte and rejoining former teammates such as Derek Jeter, Jorge Posada and Mariano Rivera might be enticing to the seven-time Cy Young winner.
"I think there's a strong relationship between the Astros and Roger Clemens, whether he plays for us or not next year," Astros GM Tim Purpura said. "With his future being involved with us on personal services basis, that relationship will always be strong. I hope that doesn't change."
Regardless, Pettitte adds another experienced arm to the Yankees' rotation. The left-hander had no trouble handling the pressure of October, either, winning 13 games in the postseason for New York.
Mark Feinsand is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.