League sources told ESPN and MLB Media on Wednesday that Encarnacion and the White Sox reached agreement on a one-year, $12 million contract with a club option for 2021 at $12 million. The team has yet to confirm the deal.
Encarnacion, 36, had a .244 batting average in 109 games between the Seattle Mariners and Yankees last season. New York acquired the three-time All-Star selection from the Mariners in June after injuries struck the Yankees' lineup.
Encarnacion led the American League with 21 home runs at the time of the trade, but a strained left oblique limited the first baseman and designated hitter in the second half of the season. In 44 regular-season games with the Yankees, he posted a .249 average with 13 homers, 37 RBIs and an .856 OPS.
Encarnacion hit .308 during the Yankees' AL Division Series win over the Minnesota Twins in October. His production decreased in the AL Championship Series against the Houston Astros, as he went 1-for-18 in the series.