The agreement came one day after the Yankees traded A.J. Burnett to Pittsburgh, a deal in which the Pirates pay $5 million of the pitcher's salary in 2012.
The person spoke on condition of anonymity Monday because the deal had not been announced.
Raul Ibanez is a 39-year-old outfielder who played with Philadelphia the last three seasons. He is expected to be the Yankees' primary designated hitter against right-handed starting pitchers. New York decided on him over Johnny Damon and Hideki Matsui, who also are free agents.
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