ESPN reports that the deal is worth $2.1 million.
Pineda has only started 13 games since being traded to the Yankees in January 2012, all of which came in 2014. After missing the 2012 and 2013 seasons due to a shoulder injury that required surgery, Pineda missed time last season due to a suspension and a muscle strain.
In his 13 starts, the 25-year-old went 5-5 with a 1.89 ERA and 59 strikeouts in 76.1 innings. As a rookie with the Seattle Mariners in 2011, Pineda was 9-10 with a 3.74 ERA.
New York also announced it has reached a one-year deal with pitcher David Carpenter, whom the Yankees acquired from the Atlanta Braves on Jan. 1.
The Yankees went 84-78 in 2014, finishing second in the AL East.
- Molly Geary