The Yankees have finalized a four-year contract with Carl Pavano worth $40 million, ESPN's Peter Gammons reported Friday.
Pavano decided Saturday that he wanted to join the Yankees.
The pitcher's deal also has a team option for a fifth year at $15 million with a $2 million buyout if the option is not picked up. Pavano also can become a free agent after four years if he pitches 200 innings in the third and fourth years of the deal.
A news conference to introduce Pavano as a Yankee is expected on Wednesday.
Anaheim, Baltimore, Boston, Detroit and Seattle also sought the right-hander, 18-8 with a 3.00 ERA for Florida last season.
Information from The Associated Press was used in this report.