CBSSports.com was the first to report on Wednesday that Yankees managing general partner Hal Steinbrenner met with Jackson's agent, Scott Boras, to discuss the hurler.
While both Steinbrenner and general manager Brian Cashman have expressed interest in adding pitching, it had been previously thought that Jackson's salary demands would exceed what the Yanks are willing to spend at this time.
Multiple reports have suggested that the 28-year-old Jackson was originally looking for a five-year commitment worth approximately $15 million to $17 million per season, though his demands have likely decreased with the winter progressing.
Jackson pitched last season for the White Sox and Cardinals, posting a combined record of 12-9 with a 3.79 ERA in 32 games (31 starts). He made four postseason starts for St. Louis, going 1-1 as the Cards won the World Series.
Over a nine-year career with the Dodgers, Rays, Tigers, D-backs, White Sox and Cardinals, Jackson -- a 2009 American League All-Star -- is 60-60 with a 4.46 ERA.
Other than re-signing their own players, the Yankees have had a relatively quiet offseason. Their rotation currently figures to be headed by CC Sabathia, with A.J. Burnett, Freddy Garcia, Phil Hughes, Hector Noesi and Ivan Nova competing to slide in behind the ace left-hander.
New York also has a crop of promising hurlers at the Minor League level, headlined by prospects Manny Banuelos and Dellin Betances, but also including other rising options like D.J. Mitchell, David Phelps and Adam Warren.
"Look, we were concerned about pitching last year, and it ended up working out pretty well," Steinbrenner said earlier this offseason. "But I'm still a little concerned about our rotation."
New York has been reluctant this winter to increase their payroll, which still figures to exceed $200 million for 2013 but could be reduced below $189 million for the '14 season.
There is some precedent to Boras and the Yankees working an unexpected deal. Last January, Cashman publicly stated he would not lose a Draft pick as compensation for signing right-handed reliever Rafael Soriano, but he was overruled by ownership and Soriano agreed to a three-year, $35 million contract.