Sources: Johnson, Yankees agree

The Yankees, frustrated in their attempts to re-sign Johnny Damon, have reached agreement on a one-year deal with Nick Johnson, pending a physical, sources said.

The deal will pay Johnson $5.75 million guaranteed -- the salary for 2010 is $5.5 million, and there is a buyout on the 2011 option that starts at $250,000 but can escalate based on his plate appearances in 2010. The contract also provides another $1 million in incentives based on plate appearances.

Johnson, who was drafted and developed by the Yankees, will presumably serve as the team's designated hitter and No. 2 hitter. Johnson's career has been filled with injury, he doesn't hit for a lot of power, and his defense at first base has been viewed by scouts as regressing. But when he plays, he consistently gets on base. Among current free agents, Johnson had the highest on-base percentage in 2009, at .426 with the Nationals and Marlins.

This likely means the end of Damon's tenure with the Yankees. Damon signed a four-year, $52 million deal with the Yankees prior to the 2006 season and took advantage of the Yankees' new ballpark to have a strong 2009 season.

The Yankees have hoped to sign Damon to a two-year deal in the range of $18 million, but the team was told by a conduit of Damon that unless the team was willing to offer at least $13 million a year -- the outfielder's salary in 2009 -- in a multi-year deal, the Yankees shouldn't even bother making an offer.

Another concern within the organization was that even if Damon were to agree to the team's terms, he might be so frustrated by the cut in pay after a strong 2009 season that his play would be affected.

Buster Olney is a senior baseball writer for ESPN The Magazine. Information from ESPN.com's Jayson Stark was used in this report.