The New York Yankees non-tendered McGehee at the end of October to avoid paying him north of $2.5 million in arbitration, making him a free agent.
Several free-agent third baseman have been picked up this winter despite a rather thin market at the position, but McGehee's name never surfaced in rumors, so the signing with Rakuten is probably his best shot at a starting job with a professional club.
McGehee will take over at third base for another former MLB player, Akinori Iwamura, who was released by Rakuten after hitting .209/.316/.343 with a single home run in 26 games.
The right-handed hitting McGehee began the 2012 season with the Pittsburgh Pirates, but was traded at the deadline to the Yankees to give the club some depth at the hot corner. He did not perform well once in the Bronx, hitting just .151/.220/.264 in 59 plate appearances, and has really been in decline for the past two seasons.