The pitcher will get a raise from $4,265,000 to $7,365,000 instead of his request for $8.8 million.
Arbitrators Margaret Brogan, James Oldham and Robert Herzog made the decision Thursday, a day after hearing arguments.
The 28-year-old right-hander was 13-12 with a 3.01 ERA in 34 starts for the Angels last season and led the major leagues with 233 strikeouts. His record was down from 16-8 in 2009, but his ERA improved from 3.75.
Players and owners have split the two decisions thus far this winter. Pittsburgh pitcher Ross Ohlendorf won Wednesday despite going 1-11 last season.