The non-guaranteed contract gives Chamberlain a raise of $200,000 and contains performance bonuses for games finished.
Chamberlain, 27, missed more than half the 2012 season after undergoing Tommy John surgery the previous June. He returned to action on Aug. 1 and appeared in 22 games, going 1-0 with a 4.35 ERA. After suffering through some shaky outings in August, Chamberlain pitched well through most of September, allowing just four earned runs in 14 appearances. He also appeared in two playoff games.
With Mariano Rivera returning as the closer, David Robertson working as the eighth-inning setup man and Rafael Soriano having departed for free agency, the Yankees hope Chamberlain can become their seventh-inning pitcher this season.
Two Yankees remain in arbitration: right-hander Robertson and left-hander Boone Logan.
New York's projected payroll is at about $200 million for 16 players, including $8.5 million the Yankees are paying Pittsburgh as part of last year's trade that sent A.J. Burnett to the Pirates.
Information from The Associated Press was used in this report.