Sabathia will sign a one-year, $10 million deal after he passes a physical, sources confirmed to ESPN. MLB.com first reported the terms of Sabathia's agreement.
"CC feels there's unfinished business to attend to," agent Kyle Thousand of Roc Nation Sports told MLB.com. "There were competitive offers that CC was weighing, but in the end, CC wanted to come back and win a championship with the Yankees. He loves his teammates, the clubhouse and the moves the Yankees are making. He wants to bring home another championship to the Yankee fans."
Sabathia, 37, had an excellent 2017, finishing 14-5 with a 3.69 ERA. He started the Yankees' Game 5 American League Division Series win in Cleveland and the Game 7 American League Championship Series loss in Houston.
He said after the season that his first choice was to remain with the Yankees. Sabathia and his family have lived in New Jersey since he joined the Yankees and led them to a championship in 2009.
He has been through a lot as a Yankee, including acknowledging alcohol dependency and entering rehab right before the 2015 playoffs. He has suffered from knee issues for years, needing microfracture surgery. As recently as August, Sabathia thought his career might be in jeopardy because of his knee problem. However, he rallied to the point where he was former manager Joe Girardi's choice to get the ball in the decisive playoff games.
Sabathia has been considered one of the Yankees' leaders since his arrival, but especially in recent seasons, with the departures of players like Mariano Rivera, Derek Jeter and Alex Rodriguez.
Before Sabathia's signing, the Yankees had Luis Severino, Masahiro Tanaka, Sonny Gray and Jordan Montgomery as possible starters. Chad Green, who made a big impact out of the bullpen in 2017, will enter spring training as a starter.
Information from ESPN's Andrew Marchand was used in this report.