Diaz will earn $1.2 million plus a chance to make an additional $800k in incentives if he makes New York's big league roster.
The 34 year-old outfielder hit .222 with two home runs and 13 RBI in 51 games last season with the Atlanta Braves. His season was ended short in August after a thumb injury required surgery to repair.
With three left-handed hitters, Brett Gardner, Curtis Granderson, and Ichiro Suzuki, expected to start in the outfield next season, the Yankees were focused on acquiring a right-handed hitter such as Diaz to platoon at the corner outfield positions against left-handed pitchers.
Though Diaz is batting just .250 over the past three seasons, he is hitting .281 against lefties in that span and holds a career .324 batting average against left-handed pitchers.
The versatile veteran can play both left field and right field.
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