Andy Pettitte took a pay cut from $16 million to $5.5 million. (Ronald Martinez/Getty Images)

New York Yankees pitcher Andy Pettitte wasn't happy about it, but he agreed to re-sign for much less anyway.

Pettitte, 36, reached terms Monday a one-year, $5.5-million US contract with the Yankees, who paid him $16 million US last season.

The new pact includes an additional $6.5 million US in performance incentives.

"It does take a shot at your pride a little bit," Pettitte said in accepting the pay cut. "But when you put all that aside, I wanted to play for the New York Yankees and, you know, that was the bottom line."

"If, in fact, Andy does in 2009 what he has done before, he will actually make more money," said Randy Hendricks, Pettitte's agent. "So in that case we would have no regrets.

"If things would go wrong, we might be in position to say, 'Maybe we should have taken the left fork in the road, instead of the right fork in the road.' But that is, as Andy said, part of life and part of negotiations."

The Yankees offered Pettitte $10 million US last month, but the offer was withdrawn when they signed free-agent first baseman Mark Teixeira to an eight-year, $180-million US deal.

"It just got to the point where Randy called me and said, 'I think this is it, buddy,'" Pettitte said. "It did not take me long to decide because I knew that was where I was going to play.

"I wanted to be there. I wanted to play in that new stadium."

Pettitte was the winning pitcher in the final game at old Yankee Stadium on Sept. 21, completing the season with a 14-14 record and a 4.54 earned-run average in 33 starts.

The stylish left-hander would likely have fared much better had he not been hampered by a sore pitching shoulder in his final 11 starts (2-7, 6.23 ERA).

But Pettitte has helped the Yankees win the World Series four times, so will provide stability to a pitching staff anchored by newcomers CC Sabathia and A.J. Burnett.

"He is going to be someone a lot of these guys on the block can lean on," Yankees general manager Brian Cashman said.

Pettitte was coveted by several teams willing to pay him "an awful lot more money than what I signed for."

But he later acknowledged "there was never another team brought up. I wanted to come back to the Yankees."

Pettitte is 215-127 lifetime with a 3.89 ERA and 25 complete games in 436 appearances (426 starts) over 14 MLB seasons with the Yankees and Houston Astros.

With files from the Associated Press