Sizemore will be paid a $5 million base salary, plus $4 million in performance-based incentives -- giving him a chance to earn the $9 million he would have made had the Indians not declined a team option for 2012 last month.
Sizemore, 29, generated interest from at least eight teams and appeared ready to let the market play out over the coming weeks. But the Indians got back into the bidding and soon moved to the front of the line.
Although there were "good offers from good organizations," Sizemore decided to stay with the one that has patiently waited for him to get healthy.
"They know me better than anybody," Sizemore said Wednesday.
Sizemore, a career .269 hitter who twice appeared in all 162 games for the Indians, hit .224 with 10 home runs in 71 games in an injury-plagued 2011 season.
Sizemore has undergone five surgeries, including a microfracture procedure on his left knee, the past two years and has only played in 210 games over the last three seasons because of injuries. But the Indians are confident that a healthy Sizemore can help them contend in the AL Central.
"We're obviously optimistic," said general manager Chris Antonetti. "We know that when he's been on the field, he's been a very productive player. We know it's not going to be for 155 or 160 games per year, but we feel optimistic Grady will get back to the point that he is a very good player for us."
After the Indians declined the option, making him a free agent for the first time., Antonetti flew to Arizona to personally meet with Sizemore and explain the team's reasons for letting him go. Antonetti said the team was not closing the door on Sizemore and the Indians would gladly re-sign him -- at the right price.
"The Indians were aggressive in wanting to keep Grady, and he has said all along he would keep an open mind toward returning," said agent Joe Urbon. "He appreciates the interest from other clubs, and he just felt that the best place to reassert himself as a great player is in Cleveland. He can stay in center field, which is important to him, and he has enjoyed his time there.
"Now, he can focus on his play without the distractions of new surroundings, and he will be a free agent again just after his 30th birthday."
In eight major league seasons, Sizemore has hit 139 home runs, appeared in three All-Star Games and won two Gold Gloves.
There are skeptics who doubt Sizemore will ever play at the level he once did. He's not worried about anything other than getting ready to play.
"I want to prove to everyone that I can stay healthy and I can perform," he said. "I want to have a healthy year and get back to playing like I know I can."
Information from The Associated Press was used in this report.