The Yankees and Phil Hughes avoided arbitration Monday by agreeing to a one-year, $3.25 million contract.

Hughes’ agents, CAA, posted the news on their Twitter account. The 25-year old went 5-5 with a 5.79 ERA last season in 14 starts and three relief appearances. After giving up 16 runs in 10 1/3 innings over his first three starts, Hughes went on the disabled list with arm fatigue and missed three months.

With the Yankees acquiring Michael Pineda in a trade and signing Hiroki Kuroda last week, Hughes will not be a lock for this year’s rotation. He is expected to battle A.J. Burnett and Freddy Garcia for the fifth starter’s job.

Hughes’ deal includes performance bonuses.