SCOTTSDALE, Ariz. -- The Giants added a much-needed left-hander to solidify their bullpen by agreeing with free agent Tony Watson on a two-year contract with a player option for a third season, the team announced on Monday.
Multiple sources first confirmed the deal on Saturday. The length of the contract, which reportedly is valued between $7 million and $9 million guaranteed, enabled the Giants to keep their player payroll under the threshold for the Competitive Balance Tax.
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Before the deal was officially announced, manager Bruce Bochy said, "We're talking about an outstanding player."
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Right-hander Joan Gregorio was designated for assignment to clear room on the 40-man roster for Watson.
Giants closer Mark Melancon, a teammate of Watson's in Pittsburgh from 2013-16, acknowledged trying to persuade his friend to sign with San Francisco.
"I couldn't be more ecstatic," Melancon said. "The guy is one of the most professional people I've ever been around. I spent three-and-a-half, four years with him. There's not one negative thing that I can ever say about him."

The Giants' left-handed bullpen contingent had looked shaky. Steven Okert and Josh Osich have demonstrated talent but remain erratic. Will Smith is in the latter stages of recovery from Tommy John surgery, and he probably won't be ready to perform in the Majors until May. Ty Blach is able-bodied, but he'll likely be needed in the starting rotation.
Watson isn't strictly a left-handed specialist who's summoned primarily to retire left-handed batters, however. For his career, he has limited lefty hitters to a .216 average and .574 OPS, comparable to the .226 average and .661 OPS recorded against him by right-handed batters.
In 14 career appearances at AT&T Park, Watson is 0-1 with two saves. He has allowed 16 hits in 12 1/3 innings but no home runs there.
A National League All-Star in 2014, when he appeared in a league-high 78 games, Watson owns a career record of 33-17 with 30 saves. In 2012, one year after his rookie campaign, he began a six-season streak in which he made at least 67 appearances each year.
"He's very businesslike," Melancon said. "He's here to get the job done. I think that fits this clubhouse and our M.O. here."
Watson, 32, split last season between the Pirates and Dodgers, who acquired him at the non-.waiver Trade Deadline. Watson made 11 postseason relief appearances for the Dodgers, including five in a row in Games 2-6 of the World Series. He yielded two earned runs in seven innings during the entire postseason.