Wednesday's deal, which is not guaranteed, avoided salary arbitration. Players and teams without agreements are set to swap proposed arbitration salaries on Friday.
Hughes, who is eligible for free agency after next season, was 18-8 in 2010, slumped to 5-5 the following season as injuries slowed him, then rebounded to a 16-13 record last year.
New York's projected payroll is at about $198 million for 15 players, including $8.5 million the Yankees are paying Pittsburgh as part of last year's trade sending A.J. Burnett to the Pirates.