York was awarded $2.85 million by an arbitrator Saturday. The Islanders had 48 hours either to accept the decision and pay York or to decline the deal, which would have allowed the 28-year-old to become an unrestricted free agent.
"Letting Mike York go was never a consideration," new Islanders general manager Garth Snow said. "He is a very important player for us, a proud Islander. Mike wanted to stay on Long Island and we wanted him here."
Selected in the sixth round of the 1997 draft by the New York Rangers, York recorded 13 goals and 39 assists in 75 games with the Islanders last season, his first with the team after being acquired from Edmonton for Michael Peca on Aug. 3. In 449 career games with the Rangers, Oilers and Islanders, York has 111 goals and 287 points.
A native of Michigan, York represented the United States in the 2002 Winter Olympics, notching an assist in six games en route to a silver medal.