The Indians made the moves before playing Friday night at Yankee Stadium. They also sent right-hander Adam Plutko back to Triple-A Columbus, a day after he was added as the 26th man for a doubleheader and earned his first big league win.
Cleveland chose to keep Erik Gonzalez over Urshela -- the 26-year-old backup infielders were out of options, and one of them had to go after Urshela came off the 10-day disabled list.
Gonzalez went 7 for 12 over the previous two days, was hitting .391 in 15 games and has played all four infield spots this season. Urshela hadn't played this year while recovering from a hamstring injury.
Both players signed with Cleveland in 2008 and are longtime friends. Gonzalez said he found out he'd been kept when he arrived at the ballpark. The two players had talked in the past about the impending decision.
"But we really tried to avoid the topic," Gonzalez said through a translator. "I never wanted this to come between us."
Manager Terry Francona said the Indians liked each player, but realized they would likely lose one of them.
"I'm not sure we could've made a wrong choice," he said.
The 34-year-old Ogando was 2-0 with a 2.89 ERA in four starts at Columbus. The former big leaguer played in Korea last year.
After using eight relievers in Thursday's split with Toronto, Francona wanted a pitcher who could throw multiple innings against the Yankees, if needed.