Prior, the second overall pick in the 2001 draft behind Joe Mauer, went 18-6 and made the All-Star team for the Chicago Cubs in 2003. But his career gradually spiraled downhill because of injuries, and he hasn't pitched in the major leagues since 2006.
Multiple reports said Prior will earn $750,000 if he's in the big leagues, and could earn an additional $750,000 in incentives.
Prior auditioned for teams last summer with the Orange County Flyers in the independent Golden Baseball League.
Prior will be reunited with former Cubs pitching coach Larry Rothschild in New York.
Jerry Crasnick is a senior baseball writer for ESPN.com