Desperate for pitching and a productive bat in their depleted outfield, the Yankees took on Abreu's hefty contract, hoping he can help them catch first-place Boston in the AL East.
The Yankees sent the Phillies 20-year-old minor-league shortstop C.J. Henry -- their No. 1 pick in 2005 -- and 27-year-old left-handed reliever Matt Smith. The Phillies also received minor league catcher Jesus Sanchez and right-hander Carlos Monasterios, while the Yankees took on responsibility for Abreu and Lidle's contracts.
Abreu could have exercised his no-trade clause and killed the deal, as his agent said recently that any team expecting to acquire Abreu would have to pick up his $16 million option for 2008 in order for a trade to go through.
However, the Yankees wanted Abreu under the expectation that they would be paying only the $22 million owed on his deal through 2007 and told the Phillies to negotiate any deal required to waive the no-trade clause, ESPN's Buster Olney reported.
A source with knowledge of the deal told ESPN Insider Jerry Crasnick that the Phillies will pay Abreu $1.5 million in exchange for waiving the no-trade clause and accepting the condition that the Yankees are not obligated to pick up his option for 2008.
Not including that payout, the Phillies could save as much as $23 million on Abreu alone, according to ESPN.com's Jayson Stark.
Abreu is making $13.5 million this year and is owed $15.5 million next season. He has a club option for $16 million in 2008 with a $2 million buyout.
The deal tentatively called for the Phillies to receive one minor-league player -- Henry -- and another from a list of players. But Stark reported the Phillies received two players because they agreed to take Sanchez and Monasterios from the Gulf Coast League.
Abreu's arrival could mean Sheffield won't return to New York next year. The Yankees hold a $13 million option on his contract for 2007.
Abreu was pulled from Philadelphia's starting lineup about 10 minutes before the first game of Sunday's day-night doubleheader against Florida, but he remained in the dugout. He walked around hugging teammates in the third inning and stayed on the bench, laughing, chatting and cheering.
When the trade was announced to the crowd before the ninth inning, Abreu got a standing ovation. He came out of the dugout, waved and blew kisses to fans. Lidle also came out and tipped his hat.
Abreu was batting .277 with eight homers and 65 RBI. His 91 walks led the majors and his .427 on-base percentage was third in the National League. He has 198 home runs and 841 RBI over 10 seasons.
Lidle provides depth in a rotation that has struggled due to injuries and inconsistency. The 34-year-old right-hander is 8-7 with a 4.74 ERA in 21 starts this season. He has won his last four starts, pitching eight innings in each of the last two.
When the Phillies began shopping Abreu last offseason, they wanted a front-line starter in return. Instead, they didn't get anyone they can insert into a struggling rotation.
Smith, 27, converted from a starter to a reliever in the minors last season, didn't allow a run in 12 innings with the Yankees this season. He was sent to Triple-A Columbus on July 4.
Henry, 20, was the 17th overall selection in the 2005 amateur draft. He was hitting .232 with two homers and 33 RBI in 76 games for Charleston in the South Atlantic League. He'll be assigned to Class-A Lakewood.
Sanchez, 18, and Monasterios, 20, both were signed in 2004 and played for the Gulf Coast Yankees. Sanchez was hitting .264 in 23 games, and Monasterios was 1-2 with a 2.97 ERA in seven games. Both will be assigned to Philadelphia's Gulf Coast League team in Clearwater, Fla.
The trade reunites Abreu, 32, with his former manager, Larry Bowa, who is the Yankees' third-base coach.
One of the most underrated players in the league for years, Abreu made his first trip to the All-Star Game in 2004 and thrust himself into the national spotlight with a tremendous power display in the Home Run Derby during All-Star week last year, hitting a record 41 homers.
But the left-handed hitting Abreu left his power stroke in Detroit, site of the 2005 Midsummer Classic. He has just 14 homers since, and hasn't gone deep since June 13, a span of 132 at-bats.
Abreu slumped terribly in the second half last season when the Phillies needed him during a playoff race. His name had been mentioned in several trade scenarios since Pat Gillick replaced Ed Wade as general manager last November.
A fan favorite early in his career, Abreu was sometimes vilified in Philadelphia in recent years. Though he won his first Gold Glove last season, Abreu's defense was heavily criticized, especially because it often appeared he shied away from contact with the wall.
Some critics say he takes too many pitches, particularly in clutch situations with runners on base. And, Abreu's preference to bat third when he might have been a perfect fit as a leadoff hitter in Philadelphia's lineup made him appear selfish.
Abreu came to the Phillies in 1997 in a trade with Tampa Bay after he was selected by the Devil Rays from Houston in the expansion draft. Shortstop Kevin Stocker went to Tampa Bay in that deal, one of the best trades in Phillies history.
Abreu has batted at least .300 six times, including a career-best .335 in 1999. He had two 30-homer seasons in 2001 and 2004, and stole more than 30 bases in each of those years.
The Yankees have been without Matsui since he broke his left wrist in May, and Sheffield hasn't played since May 29 because of a wrist injury.
Sheffield is targeting a return in September, while Matsui is hoping to come back next month -- though that might be a bit optimistic.
The trade could signal that the Yankees aren't sure they'll get Sheffield back this season.
The Phillies hoped to make a playoff run after finishing one game behind NL wild-card winner Houston last year. But they faltered at the start of the season and played poorly since a 13-1 run in early May.
Information from The Associated Press was used in this report.