Saying that he never wanted to cruise the market as a free agent, Sabathia instead inked a one-year, $25 million contract extension that includes a $5 million buyout.
He is now under contract through at least 2016, as the team has a vesting option for the '17 season.
"I was confident that we would get to an agreement," Sabathia said. "I wanted to stay here, I wanted to be here, I loved it here. I love pitching here, I love being a part of the Yankees organization, and I'm so happy to be able to come to an agreement."
Sabathia had until midnight ET on Tuesday to exercise the opt-out clause, which would have shredded the remaining four years and $92 million on a seven-year, $161 million deal signed before the '09 season.
After receiving an offer from the Yankees over the weekend, Sabathia said that his main objective was cementing more seasons in a Yankees uniform, and he downplayed the financial aspect of the extension.
"I didn't want to be a part of that being a free agent and doing everything, opting out and all that stuff," Sabathia said. "It was clear to everybody that I wanted to be a Yankee, wanted to end my career as a Yankee. Hopefully, I've done that."
Sabathia, 31, is 59-23 with a 3.18 ERA over his three seasons with the Yankees. He went 19-8 with a 3.00 ERA during the regular season, but he was outdueled on short rest by the Tigers' Justin Verlander in a Game 3 American League Division Series start in Detroit, and he coughed up a run in a Game 5 relief appearance as the Yankees' season ended.
"CC is the ace of our pitching staff, a leader in our clubhouse and a driving force for the Yankees in our community," Yankees general manager Brian Cashman said. "He is exactly the type player and person that Yankees fans and this organization can be proud of. We are excited that he will be wearing the pinstripes for many years to come."
In Taiwan, Yankees outfielder Curtis Granderson was pleased by Sabathia's decision and said that he expects the hurler to continue getting better in the years to come.
"It's a great thing," Granderson said. "It's a bit of a relief, not only on their side, but just knowing that he's happy too. When you have a player that's happy, he's going to be able to go out there and perform at his best. And sure enough, he is happy and that's the reason why he's definitely remaining."
Sabathia noted that slimming his physique will be a winter goal. He lost a considerable amount of weight before the 2011 season, a diet he attributed partly to giving up his beloved Cap'n Crunch cereal, but he raised some eyebrows late in the season by appearing to pack most -- if not all -- of the weight back on.
He acknowledged that he "got a little lax during the season" with his training regimen but said his shoulder, knee and arm all feel "great." Still, Sabathia said he must refocus on losing weight this winter.
"I think it's something I need to do, regardless, for me -- and be proactive," Sabathia said. "I just need to go out and be healthy and try to do what I can to be out there for every start with this team. For me, that means losing weight, so that's what I'll do."
Sabathia also refused to point to the Yankees' six-man rotation as a reason for his late-season struggles, though he was consistently vocal about preferring to pitch on the regular four days' rest. Sabathia was just 3-3 with a 4.30 ERA in nine starts after Aug. 1, allowing opponents to hit .314 against him.
"I'm not going to sit here and say that the change in my routine had anything to do with the last month," Sabathia said. "When it's my time to go, and they give me the ball, I'll go out there and pitch."
With Sabathia secured, the Yankees can turn their offseason attention to other pressing issues. Cashman's own situation -- his contract was set to expire Monday -- is said to be all but complete, and the club could make an official announcement of a new deal on Tuesday.
The Yankees are also expected to be in the market for starting pitching to supplement Sabathia. The names of C.J. Wilson, Mark Buehrle and Roy Oswalt have been bandied about as topics of interest in early Hot Stove fodder, as well as Japanese hurler Yu Darvish.
"We're a pretty good team. We'll see what happens," Sabathia said. "I'm just glad to be a part of the organization and glad to be part of the plan going forward."
Over his career, Sabathia has 176 wins and a 3.51 ERA over 11 seasons with the Indians, Brewers and Yankees. He is a five-time All-Star and won the Cy Young Award in 2007.
Though he celebrates his Bay Area roots and is active in his hometown of Vallejo, Calif., Sabathia constructed a large home in the New York suburb of Alpine, N.J., and has made the tri-state area his full-time residence, a point he stressed repeatedly on a conference call with reporters late on Monday.
As Cashman was pursuing Sabathia in December 2008, the Yankees originally presented the opt-out clause as a fail-safe in case Sabathia came to New York and wasn't comfortable. Clearly, that wasn't an issue.
"Our family is comfortable here, we have a good time, we love it here, we relax here," Sabathia said. "This is our home. I never really bought into what was going on, if we were going to opt out or if we weren't. This is our house, this is our home. We'll continue to grow here and be part of the community."