The deal is reportedly for one-year and $12 million, the deal that has been on the table since the Winter Meetings.
Youkilis, 33, has played both third and first base in the past, and will fill in at third until Alex Rodriguez returns from a second hip surgery he will be having.
The Yankees lost Eric Chavez when he signed with the Diamondbacks, and were unable to sign Jeff Keppinger.
Youkilis hit .235/.336/.409 last season, slugging 15 home runs for two different teams. The third baseman played 122 games, his most since 2009, when he played 136.
The Yankees have been avoiding long-term contracts this offseason as they want to avoid the luxury tax, a new spending strategy for the previously bottomless-pocketed Yankees.