NEW YORK - The New York Yankees reeled in another prime free agent, reaching a preliminary agreement yesterday with first baseman Mark Teixeira for $180 million over eight years.

Two people familiar with the negotiations disclosed the agreement, which is subject to a physical. They spoke to the Associated Press on condition of anonymity because the deal was not yet final.

Teixeira's deal, which includes a signing bonus of about $5 million and a no-trade provision, raises the Yankees' off-season spending spree to $423.5 million. Just last Thursday, the Yankees completed agreements with two highly prized pitchers, giving CC Sabathia a $161 million, seven-year contract and A.J. Burnett an $82.5 million, five-year deal.

Preparing to move into their new ballpark, the Yankees will hold the four largest contracts in the sport as they try to win the World Series for the first time since 2000. Third baseman Alex Rodriguez has baseball's highest deal at $275 million over 10 years, and shortstop Derek Jeter is second at $189 million over 10 years.

Teixeira's agreement came just one day after the Yankees received a $26.9 million luxury tax bill for 2008, when their streak of 13 playoff appearances ended. But with the revenue from their new stadium, where tickets are priced at up to $2,500 per game, their appetite for free agents wasn't diminished.

His agreement raises the Yankees' commitment for next year to approximately $185 million for 16 players on the 40-man roster. New York also hopes to re-sign lefthander Andy Pettitte for about $10 million and has three players eligible for arbitration.

Just 28, Teixeira is the type of hitter the Yankees hope will revive an offense that dropped from a major-league-leading 968 runs in 2007 to 789 last season. The switch-hitter batted a combined .308 with 33 homers and 121 RBIs for the Atlanta Braves and Los Angeles Angels, who acquired him July 29. He has reached 30 homers and 105 RBIs in five consecutive seasons.

Boston Red Sox executives met with Teixeira and agent Scott Boras last week and were told they were being outbid. Teixeira, who is from Maryland, also had discussed signing with the Baltimore Orioles.

"We would have loved to have had the player, who appealed to us because of the special circumstances of where he's from and where we are. We diverted from our plan to try to get him," said Orioles president of baseball operations Andy MacPhail. "But at the end of the day, it was just too much to pay for one player."

The Washington Nationals also held talks. General manager Jim Bowden said his team's owners "demonstrated their commitment to win."

"We are disappointed we weren't able to sign him," Bowden wrote in an e-mail to the Associated Press.

The Angels made an eight-year offer during the winter meetings but withdrew it last weekend.

Teixeira will fill a void in the Yankees lineup created by the departures of first baseman Jason Giambi and rightfielder Bobby Abreu, who became free agents. It also creates a logjam for New York, which acquired first baseman Nick Swisher last month in a trade with the Chicago White Sox.

Although Swisher also can play the outfield, the Yankees have a multitude of options there, including Johnny Damon, Hideki Matsui, Melky Cabrera, Brett Gardner and Xavier Nady. It appears that Matsui is likely to be the designated hitter much of the time.