The number falls in between the $1.55 million that Bruney requested and the $1.1 million that the Yankees offered.
Bruney, 26, missed most of last season with a Lisfrac injury in his right foot, though he opted against surgery and returned to become one of the team's more consistent bullpen options down the stretch. Bruney finished 3-0 with a 1.83 ERA and 33 strikeouts in 34 1/3 innings, most of them coming in August and September.
"Everybody heals differently, and I feel like I've always healed pretty well," Bruney said late last season. "Next year is only going to be better. I'm going to come in better shape than this year. I've got goals in my head, and I'm looking forward to doing the work."
For his career, Bruney has produced a 4.34 ERA in three seasons with the Yankees and two with the Diamondbacks.
The Yankees can now enter Spring Training without any lingering contract obligations to their players. They signed Chien-Ming Wang to a deal worth $5 million last month, and inked their other two arbitration-eligible players, Xavier Nady and Melky Cabrera, earlier in January.
Had the Yankees not settled with Bruney, both parties would have had to attend an arbitration hearing during Spring Training.
Anthony DiComo is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.