The Yankees also agreed to a one-year, $1.05 million contract with right-hander Luis Cessa and a one-year deal with right-hander Ben Heller, who gets $625,000 in the majors and $225,000 in the minors.
The Yankees allowed right-hander Jonathan Holder to become a free agent, declining to offer a 2021 contract.
Sanchez was replaced by Kyle Higashioka as the Yankees’ primary catcher in the playoffs after hitting just .147 in the regular season with 10 home runs and 24 RBIs.
The .147 average would have been the lowest in the majors if he had had enough at-bats to qualify. He continued to slump in the postseason, going 1-for-8 in three games. The one hit was a home run.
In 2019, Sanchez slugged 34 home runs in just 104 games while hitting .232.
A two-time All-Star, Sanchez has slashed .236/.320/.502 with 115 home runs and 286 RBIs in six seasons with the Yankees.
Cessa missed the start of the season after testing positive for COVID-19 and made his debut on Aug. 5. The 28-year-old right-hander had a 3.32 ERA with no decisions in 16 relief appearances and 21 2/3 innings, striking out 17, walking seven and allowing 20 hits. Cessa made $331,481 in prorated pay from an $895,000 salary.
Cessa is 7-12 with a 4.40 ERA in 19 starts and 83 relief appearances over five seasons with the Yankees. He is eligible for free agency after the 2023 season.
Heller. 29, had a 3.00 ERA in six relief appearances, striking out six and walking two in six innings. He was ejected on Sept. 2 after hitting Tampa Bay’s Hunter Renfroe on his leg with a 95 fastball, a day after New York closer Aroldis Chapman threw a 101 mph fastball over Mike Brosseau’s head, drawing a suspension.
Holder, 27, was 3-0 with a 4.98 ERA in 18 relief appearances, striking out 11 and walking 11 in 21 2/3 innings. He spent parts of the last five seasons with the Yankees.
The Associated Press contributed to this report.
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