Maholm agreed to the deal Jan. 28 and had a 2.19 ERA in five spring-training games, allowing three runs, seven hits and two walks in 12 1-3 innings with five strikeouts.
Cincinnati, which announced the decision Monday, originally envisioned Maholm competing for a rotation spot after the Reds traded Mat Latos and Alfredo Simon, but the Reds told Maholm in mid-March he was under consideration for a bullpen role.
Under baseball's collective bargaining agreement, the Reds had until Tuesday to give Maholm written notice he would be on the opening-day roster, pay a $100,000 retention bonus or release him. If added to the 40-man roster, he would have received a one-year contract calling for a $1.5 million salary in the major leagues and the chance to earn $500,000 in performance bonuses based on starts: $100,000 each for 10 and each additional five through 30.
Maholm was 1-5 with a 4.84 ERA in eight starts and 22 relief appearances for the Los Angeles Dodgers last year. He injured his right knee covering first base against the Chicago Cubs on Aug. 1 and missed the rest of the season.