NEW YORK -- The Yankees have declined a $4 million option on Damaso Marte, making the injured left-hander eligible for free agency.

Marte has missed the last 1½ seasons because of a torn labrum in his left shoulder and had surgery on Oct. 22 last year. The 36-year-old will receive a $250,000 buyout, completing a $12 million, three-year contract.

He made one minor league rehab appearance this year, allowing six runs and six hits in two-thirds of an inning for the Gulf Coast League Yankees against the Tigers on Aug. 25.

Marte was 2-6 with two saves and a 6.02 ERA in 76 games with the Yankees, who acquired him from Pittsburgh along with outfielder Xavier Nady in July 2008 for outfielder Jose Tabata and right-handers Dan McCutchen, Jeff Karstens and Ross Ohlendorf.

New York announced the decision Wednesday.