NEW YORK- The Yankees announced Thursday they have failed to reach an agreement on a contract with Japanese shortstop Hiroyuki Nakajima.

"We unfortunately could not come to an agreement with Hiroyuki," said Yankees general manager Brian Cashman in a statement. "We wish him the best of luck during the upcoming 2012 season."

The Yankees submitted a winning bid of $2 million for the 29-year-old Saitama Seibu Lions shortstop. The team faced a Friday afternoon deadline to come to terms with Nakajima on a deal.

Since no agreement was reached, the Yankees do not have to pay the Lions the $2 million negotiating fee.

The Yankees intended to use Nakajima as a backup infielder and had reportedly only offered a one-year contract.

Nakajima batted .297 with 16 home runs and 100 RBIs last season in the Nippon Professional Baseball league, and won his second Golden Glove award.