The deal is pending a physical. It includes a second-year player option that if rejected turns into a team option, sources said.
Gardner, 37, became a free agent in November when New York declined a $10 million option, triggering a $2.5 million buyout. He has been with the Yankees since 2008 and is their last player from the 2009 World Series-winning team. His 14-year tenure with one team during his career is tied for fifth among active players.
Gardner hit .223 with five homers and 15 RBIs in the shortened season, down from .251 with career highs of 28 homers and 74 RBIs in 2019. The Yankees agreed to a deal with a $2 million signing bonus and an $8 million salary for 2020, which became $2,962,963 in prorated pay.
"Obviously, he's been a great Yankee, but we'll just see how things unfold here," Yankees manager Aaron Boone had said Wednesday at spring training in Tampa, Florida.
Boone said then that Clint Frazier was projected as his starting left fielder after making great strides last year in his fourth season with the Yankees. Frazier, 26, hit .267 with eight homers and 26 RBIs in 131 at-bats during the pandemic-shortened season, after batting .267 with 12 homers and 38 RBIs over 225 at-bats in 2019.
Drafted in the third round by the Yankees in 2005, Gardner has a .259 average, 129 homers and 539 RBIs.
The Associated Press contributed to this report.