Wang missed the 2010 season due to shoulder surgery and spent the past two seasons with the Washington Nationals.
The Yankees inked Wang, 32, after he threw 12 shutout innings for Taiwan's national team in this month's World Baseball Classic.
Wang signed with New York in 2005 and compiled a 55-36 record over five seasons with a 4.16 ERA. He was 2-3 with a 6.68 ERA for the Nationals in 10 games last season, including five starts.
Gal Gadot cast as Wonder Woman for 'Batman vs. Superman'
Texas principal bans speaking Spanish, stirs controversy