LAS VEGAS -- J.A. Happ delivered exactly what the Yankees needed when he arrived in a midsummer trade, and a source told MLB.com on Wednesday that the club is nearing the finish line on an agreement that will keep the left-hander in pinstripes.
Per MLB.com's Mark Feinsand, Happ is set to sign a two-year contract with an option for a third year, which would vest if the lefty reaches a certain number of innings pitched and games started. The New York Post reported that the contract will be for two years at $34 million, with a $17 million option for the 2021 season based on games started or an innings-pitched threshold in '20, placing the maximum value of the deal at $51 million.
The deal has not been confirmed by the Yankees, and it is pending the results of a physical.
"It's hard to ever say I'm close on anything, because until you're done, you're never done," Yankees general manager Brian Cashman said late on Wednesday. "It's just not a word that's probably proper to be thrown around. Obviously Happ is a target, but we have a lot of players in the marketplace that are attractive. I guess, let's just give it time to all play out."

Widely viewed as one of the top remaining free-agent hurlers, the 36-year-old Happ fielded interest from the Astros, Blue Jays, Phillies, Rangers and Reds in recent weeks. Happ was believed to have several two-year offers in hand, while waiting for a club to include provisions for a third year.
Happ was excellent down the stretch after the Yankees acquired him in a trade with the Blue Jays on July 26, swapping infielder Brandon Drury and outfielder Billy McKinney to Toronto.
He went 7-0 with a 2.69 ERA in 11 regular-season outings, winning his first five starts for the Yankees and delivering a pair of solid efforts against the Red Sox, though he had a rocky postseason outing at Fenway Park in Game 1 of the American League Division Series.
"He was a performer; took the ball every five days," Cashman said. "He was a competitor, came as advertised, a real pro. He had a veteran presence within that clubhouse, knew exactly what was necessary and brought it every five days in the most competitive division in all of baseball and the world. He checks all the boxes on that side of it."
Overall, Happ was 17-6 with a 3.65 ERA in 31 starts for Toronto and New York, setting career highs in strikeouts (193), K/9 IP ratio (9.78) and strikeout rate (26.3 percent). He held opponents to a .225 batting average and earned the first All-Star nod of his 12-year career.

Following the season, Happ said that he hoped to return to New York.
By retaining Happ, the Yankees would have achieved their stated objective of adding two premium starting pitchers this offseason. New York acquired James Paxton from the Mariners in November, adding the left-hander to a rotation that also projects to feature Luis Severino, Masahiro Tanaka and Carsten Sabathia.
"Pax and Sevy have electric stuff, and Tanaka has a wicked split-finger that is really a difference-maker for him," Cashman said. "They're all capable of shutting down anyone's offense in a given outing. The same is true of CC, and hopefully whoever else we add to the mix."
Cashman said that signing a starting pitcher like Happ would not necessarily preclude the club from adding another. As the Yankees continue to shop right-hander Sonny Gray, they have expressed interest in Japanese left-hander Yusei Kikuchi, whom agent Scott Boras said will entertain big league clubs later this month in Los Angeles.
In addition to starting pitching, the Yankees are focused on bolstering their bullpen and solidifying their middle infield. Several conversations have taken place with the agent for infielder Manny Machado, and though Cashman has downplayed potential interest, Boras said that the Yankees have not told him that they are out of the sweepstakes for outfielder Bryce Harper.
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"The Paxton acquisition gave us the ability to be a lot more disciplined and patient, or less stressed," Cashman said. "If we can pull down another one, it'll put us in a much stronger position to feel better about the rotation, clearly. That doesn't preclude us from being open-minded to any other options that develop over time. In the meantime, it does allow us to pivot and focus further on other aspects of the roster, too."