The Yankees announced the moves late Friday after their extra-innings victory over the Texas Rangers. Austin has been recalled from Triple-A Scranton/Wilkes-Barre and started at first base in Saturday afternoon's game against Texas.
Carter went 0-for-4 with three strikeouts Friday, dropping his batting average to .204. The veteran slugger belted 41 home runs last season -- tied for the most in the National League -- but has homered just eight times this season while striking out 70 times in just 167 at-bats.
"We just felt it was time [to part ways with Carter]," Yankees manager Joe Girardi said Saturday morning. "I really believe that Chris gave us everything he had and worked hard and tried to make adjustments. He just never seemed to get untracked. It's unfortunate -- it's a difficult time in his life, it's difficult on us to have to make that move."
The strikeout-prone Carter failed to generate much interest as a free agent this past offseason despite his 41-homer outburst with the Brewers in 2016. He reportedly was considering offers to play in Japan before signing a one-year, $3.5 million deal with the Yankees.
"[Carter was] very well-liked in the clubhouse," Girardi said. "But we felt that Tyler had started to swing the bat pretty well and it was maybe time to give him an opportunity."
Austin, 25, had five homers in 31 games with New York last season but has not played in the majors this year after suffering a fractured foot in spring training. He has appeared in 32 games in the minors since returning from the injury, batting .316 with four homers and 22 RBIs.
Austin could be in line for regular playing time at first base with the Yankees while Greg Bird continues to recover from ankle and knee injuries. Bird has been sidelined since early May, and the Yankees hope he will resume baseball activities by next week.