The Yankees said that following the game against the Tampa Bay Rays, A-Rod will be unconditionally released from his player contract in order to sign a contract to serve as a special advisor and instructor with the club through Dec. 31, 2017.
"This is a tough day," Rodriguez said Sunday. "I love this game, and I love this team. And today, I'm saying goodbye to both."
The 41-year-old designated hitter has a .204 average this season with nine homers and 29 RBIs in 216 at-bats. He has had just one start and seven at-bats in 14 games since July 22.
Rodriguez has a $20 million salary this year and was owed $20 million more in 2017 in what would have been the final season of a $275 million, 10-year contract.
His career has been stained by the use of performance-enhancing substances. He missed the entire 2014 season after his acceptance of a 162-game suspension.
"After spending several days discussing this plan with Alex, I am pleased that he will remain a part of our organization moving forward and transition into a role in which I know he can flourish," Yankees managing general partner Hal Steinbrenner said in a statement. "We have an exciting group of talented young players at every level of our system. Our job as an organization is to utilize every resource possible to allow them to reach their potential, and I expect Alex to directly contribute to their growth and success.
"Baseball runs through his blood. He's a tireless worker and an astute student of the game. Alex has already proven to be a willing and effective mentor to many players who have come through our clubhouse, and I am confident that this next phase of his baseball life will bring out the best in Alex and the next generation of Yankees."
The Yankees said Rodriguez in his new role will be assigned to work with various players at all levels of the farm system, including many of the club's top prospects. He will report directly to Hal Steinbrenner and offer instruction to players in conjunction with the Yankees Baseball Operations and Player Development Departments. Rodriguez will provide the Yankees regular feedback and analysis regarding the club's minor league system. Additionally, he will serve as a guest instructor during spring training in 2017.
Rodriguez, a three-time American League MVP (2003, 2005, 2007) and 14-time All-Star (1996-98, 2000-08, 2010-11), ranks fourth on Baseball's all-time list with 696 home runs, including an all-time record 25 grand slams. He is second in baseball history with 2,084 runs batted in (trailing only Aaron's 2,297), eighth with 2,021 runs scored and 19th with 3,114 hits. He has had 14 seasons of at least 30 home runs and 100 RBIs (1996, 1998-2010), and is the only major leaguer to ever accomplish the feat.
Originally acquired by the Yankees on Feb. 16, 2004, from the Texas Rangers, Rodriguez has played 12 seasons for the club (2004-13, 2015-16), reaching the postseason nine times and winning the World Series in 2009. During that postseason, he batted .365 (19-for-52) with six home runs and 18 RBIs in 15 games, leading the Yankees in batting average, runs, homers and RBIs.
In 1,506 career games with the Yankees, Rodriguez has hit .284 with 1,012 runs, 262 doubles, nine triples, 351 home runs, 1,094 RBIs, 779 walks, 152 stolen bases, a .378 on-base percentage and a .901 OPS. On the Yankees' all-time lists, he ranks second in grand slams (15), sixth in home runs and slugging percentage (.523), seventh in OPS, 10th in runs scored, 11th in RBIs and stolen bases, 12th in walks, 17th in games played and 18th in on-base percentage.
His retirement comes just two days after Yankees first baseman Mark Teixeira announced he would retire at the end of the season.