Source: Masahiro Tanaka to Yankees
— -- Masahiro Tanaka has decided to sign with the New York Yankees, a source confirmed to ESPN's Buster Olney.
Tanaka's deal with the Yankees is worth $155 million over seven years and includes an opt-out clause after the fourth year, according to the source.
Tanaka's agreement with the Yankees was earlier reported by Fox Sports.
Tanaka, 25, went 24-0 with a 1.27 ERA in the Japanese League last season and is considered by many to be a top-of-the-rotation starter.
Under new rules set this offseason, the Yankees also owe a $20 million posting fee to the Rakuten Golden Eagles, Tanaka's team in Japan. The right-hander was still under contract with the Eagles for two more years.
Tanaka will join a revamped roster with the Yankees, who also have signed outfielder Jacoby Ellsbury, catcher Brian McCann and slugger Carlos Beltran to lucrative contracts this offseason. Those deals totaled $438 million.
New York, which missed the postseason for just the second time since 1995 this past year, added some much-needed talent to its rotation, which previously had been led by aging veterans CC Sabathia and Hiroki Kuroda.
Tanaka's agent, Casey Close, confirmed in a text message to ESPNNewYork.com that Tanaka's deal with the Yankees is done. Close had a deadline of 5 p.m. ET on Friday to have a contract and physical completed with the ace pitcher's new team.
Tanaka is 99-35 with a 2.30 ERA and 1,238 strikeouts in 175 games for Rakuten since 2007. He has 53 complete games, including 18 shutouts.
Of all the teams that were courting Tanaka, the Yankees had the largest offer to separate themselves from the field. The Yankees' expenditure ($175 million in salary and posting) is the largest ever for a free-agent pitcher.
His deal pushes the Yankees' payroll for purposes of the luxury tax over $203 million. Barring trades, there is little chance New York will get under the $189 million tax threshold.
Yankees managing general partner Hal Steinbrenner had been saying for two years that getting under the tax threshold in 2014 was a goal but wouldn't get in the way of fielding a contending team.
Tanaka receives the highest contract for an international free agent and the fifth-largest deal for a pitcher, trailing only those of the Los Angeles Dodgers' Clayton Kershaw ($215 million), Detroit's Justin Verlander ($180 million), Seattle's Felix Hernandez ($175 million) and Sabathia ($161 million under his original agreement with New York).
New York will be hoping Tanaka enjoys the same success that Japanese right-hander Yu Darvish has had with the Texas Rangers. Darvish, who agreed to a six-year, $60 million deal with the Rangers after the team won his negotiating rights with a $51.7 million posting bid, is 29-18 in two seasons with Texas, striking out 498 batters in 401 innings.
ESPNNewYork.com's Wallace Matthews and The Associated Press contributed to this report.
