NEW YORK- The New York Yankees and pitcher Phil Hughes agreed Monday to a one-year contract.

The two sides avoided arbitration by reaching a deal worth $3.2 million plus performance bonuses, according to

The agreement rewards the 25-year-old right-hander with a $500,000 raise despite an injury-plagued 2011 in which he went 5-5 with a 5.79 ERA in 14 starts and three relief appearances.

Hughes will likely compete with A.J. Burnett and Freddy Garcia for the final spot in a Yankees' starting rotation bolstered by the recent acquisitions of Michael Pineda and Hiroki Kuroda.

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