The deal is worth $2.85 million, according to The Associated Press, plus $150,000 more in possible incentives -- $25,000 each for 375, 400, 425, 450, 475 and 500 plate appearances.
Gardner, 29, was arbitration-eligible for the second time and earned $2.8 million in 2012.
The Yankees have talked about using Gardner as either their starting left fielder or center fielder in 2013, with a chance that Curtis Granderson might move to a corner outfield spot.
Gardner was limited to just 16 games this year due to a right elbow strain suffered in April that required arthroscopic surgery. He batted .323 (10-for-31) with two doubles and three RBIs.
A career .266 hitter in 475 games over five seasons, Gardner was a third-round selection of the Yankees in the 2005 First-Year Player Draft.
The Yankees also announced that infielder Jayson Nix cleared waivers and has been outrighted to the club's Triple-A roster.