by Ken Rosenthal

The deal includes a $3.5 million club option for a third season that could raise the total value to $9.5 million, the source said. None of the money is deferred.

The signing amounts to a coup for both sides: Cruz gets a better deal than most envisioned at this late stage, and the Royals get a pitcher who had the second-highest strikeout rate among relievers last season.

Cruz, 30, will team with two other right-handers, setup man Kyle Farnsworth and closer Joakim Soria, to give the Royals a formidable late-inning relief corps.

The Royals will lose their second-round draft pick to the Diamondbacks for signing Cruz, whose slow-developing market prompted Major League Baseball and the players' union to facilitate sign-and-trade discussions between Cruz's agents and other clubs.

In the end, no sign-and-trade solution was necessary. The Royals preferred to lose their second rounder rather than give up prospects to the Diamondbacks. The team's first-round pick is protected because it finished with one of the 15 worst records in the majors last season.

Cruz, who passed his physical Saturday, becomes the Royals' fourth major off-season acquisition, joining Farnsworth, first baseman Mike Jacobs, center fielder Coco Crisp.

The Royals, who traded younger relievers in separate deals for Jacobs and Crisp early in the offseason, replaced those pitchers by signing Farnsworth and Cruz as free agents.

The team's willingness to continue spending became evident when it recently bid between $4.5 million and $5 million for free-agent second baseman Orlando Hudson, who instead signed for $3.38 million with the Dodgers.

Cruz, coming off two strong seasons with the Diamondbacks, lingered on the market as a Type A free agent who rejected an offer of arbitration from his previous club.

To sign such a player, a team must part with a high draft pick. Most clubs were unwilling to make that sacrifice and also commit significant dollars to a middle-inning reliever.

Cruz went a combined 10-1 with a 2.88 ERA the past two seasons, holding opponents to a batting average/on-base/slugging line of .199/.318/.353 and striking out 158 in 112 2/3 innings.