Hill, who hit .205 with 26 homers and 68 RBIs last year, will earn $5 million this season. His unique contract had $8 million options for 2012 and 2013 and a $10 million option for 2014. The Blue Jays had until the start of the season to pick up all three options.
Toronto can still pick up one or two option years at the end of the season but cannot pick up the 2014 option.
General manager Alex Anthopoulos said with the way the option years are priced, he'd prefer to wait and see how Hill performs this season before making a decision.