The Yankees are counting on Youkilis, who will turn 34 in March, to slide in as the starting third baseman after learning that Alex Rodriguez will be lost until at least midseason because of left hip surgery.
"I was very humbled and amazed that the Yankees jumped into the picture," said Youkilis, who finished last season with the White Sox after being traded by Boston in June. "I never thought I'd be on the other side of the rivalry.
The Yankees have said that they expect Rodriguez to have surgery next month and return at some point during the '13 season, but general manager Brian Cashman said on Friday that there is no way to be absolutely certain. If Youkilis must be the everyday third baseman next season, Cashman said he feels fine with that.
"Youkilis can play third, first, he can DH obviously, and he's going to be our everyday third baseman until Alex comes back," Cashman said. "The expectation is that Alex will come back [in 2013], but I have no guarantees or anything of that nature either."
Cashman said that the Yankees did hold some trade discussions about other third-base options, "but they weren't going anywhere," leading them to Youkilis' doorstep.
The deal nearly matches Youkilis' $12.25 million salary in 2012, when he batted a combined .235 with 19 home runs and 60 RBIs in 122 games for Boston and the White Sox.
"This is an important acquisition to sign Youkilis, because, obviously, he certainly cushions the blow of losing Alex," Cashman said. "That's a difficult loss. A healthy Alex Rodriguez really is one of the more productive players, but I can't think of anybody better on a short term to replace him than Youkilis."
Youkilis is a career .283 hitter in 1,033 big league games, hitting 148 home runs and collecting 610 RBIs -- beginning with his callup to Boston in 2004. He also reportedly drew interest from the Dodgers and Indians.
"Quite honestly, in talking with my family, we thought it would be an unbelievable experience to live in New York City for a year," Youkilis said. "We also just thought it would be the best opportunity for myself and my family to enjoy another World Series."
The nine-year veteran had run-ins with the Yankees over the years, including repeated incidents with pitcher Joba Chamberlain, but Chamberlain left Youkilis a voicemail after news of the signing broke.
Youkilis said that he planned to call Chamberlain back soon, and that any lingering tensions will be forgotten quickly.
"It's not a big deal to me. If it was that big of a deal, I wouldn't be signing with the Yankees," Youkilis said. "But I don't think it's that big of a deal. And I think a lot of it was made out to be a lot bigger with the media and the fans."
To create room on the 40-man roster for Youkilis, the Yankees designated left-hander Josh Spence for assignment. They are also working to finalize a two-year contract with Ichiro Suzuki, a deal that could be completed as soon as Friday.
Youkilis said that it was a shock at first to realize that his employer is in the Bronx, where he has heard plenty of negative comments over the years. But like Johnny Damon and others before him, Youkilis is hoping to turn those jeers into cheers very quickly.
"Over the years, I've had a lot of Yankee fans come up to me and say, 'Hey, I'm a huge Yankees fan, but I like the way you play the game,'" Youkilis said. "I'm going to play as hard as I can every day and I think a lot of fans will appreciate that. So that's all I can bring to the table and I hope that the Yankee fans enjoy watching me play."