The Yankees hope to finalize a deal with the 40-year-old Pettitte within the next 48 hours, completing another major piece of their pitching planning after signing veteran right-hander Hiroki Kuroda last week.
Pettitte's contract will be in the range of $10 to $12 million, according to a source, representing a healthy raise over the $2.5 million that the left-hander earned this past season after coming out of retirement.
The Yankees are also hopeful of finalizing terms on a one-year contract with all-time saves leader Mariano Rivera before next week's Winter Meetings in Nashville, with that contract figure yet to be determined.
Contrary to a report published in Japan, the Yankees are not close to an agreement with outfielder Ichiro Suzuki, as the team is concentrating on finishing their shopping for pitching first.
Pettitte made 12 starts for the Yankees in 2012, with his season interrupted by a broken left ankle suffered in late June. He was 5-4 with a 2.87 ERA and said late in the season that he hadn't been able to "fully exhaust" himself of pitching because of injury.
The Major Leagues' active wins leader with 245 and the all-time postseason wins leader with 19, Pettitte said after the playoffs that he hoped to provide the Yankees with a decision "within a month or so" in order to help the club move on to other needs.
"There's no doubt I still have the desire to compete," Pettitte said then. "For me, it's the family situation; that's just the biggest thing. I'm going to try to figure that out. It's a long season. What better job to have, to play baseball, you know? But at certain times, it gets tough when the family can't be together."
Rivera, who turns 43 on Thursday, confirmed this month that he plans to return after missing most of his 2012 season with a torn right anterior cruciate ligament. The right-hander said that he was allowing his agent, Fernando Cuza, to hammer out the details with general manager Brian Cashman.
The owner of 608 regular-season saves plus 42 more in the postseason, Rivera earned $15 million this past season in the final year of a two-year contract.
While Rivera is expected to be ready for Opening Day, it has been suggested that the Yankees will aim to give Rivera a lower base salary for this season, potentially sweetening the deal with incentives.