Rolen had been scheduled to make $11 million in 2010, the final season of the eight-year, $90 million extension he signed after being traded by the Phillies to the Cardinals in 2002.
Instead, under the terms of the new contract, Rolen will earn $6 million in 2010, plus a $5 million signing bonus that the sides agreed would be deferred without interest, according to a source who has seen the details of the agreement.
The club, in return, extended Rolen's contract two years, through 2012. He will earn
$6.5 million in each of those two seasons.
The Reds, who have been looking for ways to free up dollars, approached the 34-year-old after the season about reworking his contract.
And Rolen, who grew up in Indiana, agreed to the restructured deal this week.
Reds GM Walt Jocketty was the general manager in St. Louis when the Cardinals dealt for Rolen, who played in Toronto in 2008 and part of 2009. Jocketty was widely criticized in July when he traded two highly regarded prospects to the Blue Jays for Rolen, but the GM repeatedly has cited Rolen's leadership and work ethic as justification for the deal.
The Reds went 27-13 in games Rolen started after the trade.
Rolen hit a combined .305, with 36 doubles, 11 homers and an .823 OPS in 128 games last season for the Blue Jays and Reds.
He is a five-time All-Star and seven-time Gold Glove winner. But injuries have limited him to an average of 118 games the past three seasons.
He spent time on the disabled list after the trade to Cincinnati following a serious beaning by Colorado's Jason Marquis in only his second game with the Reds.
Jayson Stark is a senior baseball writer for ESPN.com.