Heredia, 28, becomes the latest reliever to be acquired by the Yankees this season. Since the All-Star break, they have made trades for relievers Armando Benitez, Jeff Nelson, Jesse Orosco, and Gabe White.
In 57 appearances with the Reds, Heredia was 5-2 with one save and a 3.00 ERA. He allowed 24 earned runs and 61 hits in 72 innings, walking 28 and striking out 41.
"We have a month or five weeks to sort it out," said Manager Joe Torre. "You bring people in with experience, the only thing you need to find out is how they do here. I like the fact that we're bringing quality people in."
The Reds signed Heredia as a minor league free agent last January after he appeared in 53 games for Toronto in 2002. He also has pitched for Florida and the Chicago Cubs.