From Peter Gammons at espn.com:
Gary Sheffield has decided to accept the Yankees' three-year contract offer for between $36 million and $38 million, sources close to the free-agent outfielder have told ESPN's Peter Gammons.
Sheffield did not finalize details of the deal with George Steinbrenner on Saturday; the Yankees principal owner was at a Tampa, Fla., hospital with longtime Yankee assistant Billy Connors, who suffered a heart attack Friday and underwent quadruple bypass surgery. But Sheffield has told friends the deal is done, Gammons reports.
It was initially reported that Sheffield wanted more money from the Yankees and that he was even considering re-signing with the Braves.
The Yankees moved quickly in the wake of Curt Schilling agreeing to accept a trade to Boston. They're also active in the market on other fronts:
The Yankees are close to a two year, $7 million deal with reliever Tom Gordon that is expected to be announced soon, a source told Gammons.
Yankees officials declined comment on the Gordon negotiations, but weekend discussions between the club and agent Rick Thurman were described to ESPN as "intense."
Meanwhile, it was believed that Gordon would wait until free-agent reliever Keith Foulke decides between the Athletics and Red Sox to make a decision, since Gordon and Eddie Guardado are Boston's backup plan.
The Yankees also are interested in free-agent outfielder Kenny Lofton, although sources have told Gammons that no formal offer has been made to Lofton's agent, Casey Close.
Sheffield, 35, has played for the Brewers, Padres, Marlins, Dodgers and Braves during a productive, albeit sometimes stormy career. With the Braves last season, he hit .330 with 39 homers, 132 RBI and 18 stolen bases.
Dwight Gooden, Sheffield's uncle and a former Yankees pitcher, helped convince the All-Star to seriously consider the Yankees.
The Yankees are looking for a corner outfielder to go with regulars Hideki Matsui and Bernie Williams. Last season, after they traded Raul Mondesi to Arizona, the Yankees used Karim Garcia, Juan Rivera, David Dellucci and Ruben Sierra in right field, with mixed results.