Pavano has reached preliminary agreement on a one-year, $1.5 million agreement with the Indians.

The deal also includes $5.3 million in incentive bonuses based on the number of games Pavano starts and his innings pitched.

"I feel like we're getting him at the right time," Shapiro said, according to The Associated Press. "He's very strong, in good shape now and extremely motivated. We thought he would benefit from a fresh start. It was a tough situation in New York and he was trying to justify the contract that he had."

Shapiro said the Indians put Pavano through a thorough medical exam, similar to the one they gave free-agent closer Kerry Wood before signing him. The Indians were impressed with Pavano's strength and were encouraged by his final seven starts for the Yankees last season, when he went 4-2.

The Indians are looking for stability in their rotation beyond their top two starters, left-hander Cliff Lee and righty Fausto Carmona.

Pavano, 32, made only 26 starts in his four seasons with the Yankees, suffering a variety of injuries. He went 4-2 with a 5.77 ERA last season after returning from elbow surgery in August.

News of the Indians' interest in Pavano was first reported by ESPN.

Information from The Associated Press was used in this report.