Lee starts off his $120 million, five-year contract with the Philadelphia Phillies with a relatively modest $11 million salary next season.
Including an option for 2016, the deal could be worth $135 million for six seasons, according to contract information obtained Tuesday by The Associated Press.
His pay escalates to $21.5 million in 2012 and increases to $25 million in each of the following three seasons.
There is an option for 2016 for $27.5 million with a $12.5 million buyout. For the option to become guaranteed, Lee must pitch 200 innings in 2015 or 400 innings combined in 2014 and 2015, and he also must not finish the 2015 season on the disabled list because of a left shoulder or elbow injury.
Philadelphia gains payroll flexibility after next season. Roy Oswalt enters the final guaranteed season of his contract in 2011, when he is due $16 million; and Raul Ibanez makes $11.5 million in the final season of his deal.
Baseball's hottest free agent could have had $150 million and a spot on the biggest stage in the game with its most successful team - the New York Yankees, winners of 27 World Series.
Instead, the star pitcher got up from the table and left $30 million behind.
He picked the Philadelphia Phillies, winners of just two titles in more than a century - and a team that brusquely traded him after he led them into the World Series in 2009.
The Phillies will give him $120 million guaranteed over the next five seasons, according to several people in baseball familiar with the deal.
Why does a guy leave all that money behind?
Apparently, because he had all he needed - something that agents and others in the financial end of baseball say happens more than you might expect. Lee and his family liked Philadelphia. Plus, his wife had complained that New York fans were rude and spat at the Rangers' wives during the American League championship series this fall when Lee was pitching for Texas, his other big suitor this offseason.
"Players seem to like living here," Phillies chairman Bill Giles said. "There's nice housing - and not as expensive as some other places if you want to buy or rent. The schools are good. I think our front office and manager and coaches have a good reputation around baseball right now as being good people."
Lee's move was the buzz of baseball Tuesday. He is expected to take a physical and seal the deal Wednesday in Philadelphia.
"That's the most I've ever seen a player walk away from," former Mets general manager Omar Minaya said. "It's unprecedented."
The Yankees are used to flexing their financial muscle to land free agents of their choosing. Baseball's top four salaries this year belong to players in pinstripes: Alex Rodriguez, CC Sabathia, Derek Jeter and Mark Teixeira, whose combined $100.5 million exceeded the entire payrolls of all but eight major league teams.
Perhaps the last time a premier free agent turned down this much money relative to his salary was in December 1992, when Greg Maddux stayed with the Atlanta Braves for $28 million over five years. He declined a $34 million offer from the Yankees that agent Scott Boras said could have escalated to about $38 million.
"The four primary factors are winning, family, the geographical and economics," Boras said Tuesday. "Maybe 30 percent of the players are where the focus is primarily economic. The vast majority want to meld those four factors. Only about 20, 25 percent of players take the biggest deal. They often take the secondary offer."
Lee's first big-money contract was a $14 million, four-year deal with Cleveland covering 2006-09 that included a team option for 2010 that would grow to $9 million. He then bounced around the country, getting traded to Philadelphia, Seattle and Texas before becoming a free agent and gaining the power to choose his destination.
His last stay in Philadelphia was a good one for Lee and his wife, Kristen. During the latter half of the 2009 season, he helped the defending champion Phillies return to the World Series, where he won twice but Philadelphia lost to the Yankees in six games.
Lee wasn't happy when he got traded in a four-team, nine-player deal that brought another ace, Roy Halladay, to the Phillies from Toronto.
"At first, I didn't believe it. I thought we were working out an extension with the Phillies," Lee said last December after he was dealt to Seattle. "I thought I'd be spending the rest of my career there. ... I was under the impression they wanted to keep me there for a long time. In my mind, it was going to happen."
The Phillies moved from dingy Veterans Stadium to Citizens Bank Park in 2004, changing the culture of Philadelphia fans, famous around the world for booing Santa Claus and throwing snowballs at him during an Eagles' game in 1968.
Philadelphia also has become one of baseball's biggest spenders. The Phillies' $5.7 million average salary this year was second only to the Yankees' $7.6 million, according to figures complied by the players' association.
"We used to have a hard time getting free agents to come here, so it seems to have changed 180 degrees," Giles said. "The ballpark has changed everything about the Phillies because we have the revenue, we have the fans."
The Yankees were ready to offer $150 million to Lee, with a $148 million guaranteed over seven years plus $2 million on hand for general manager Brian Cashman to close the agreement. But New York's money wasn't enough.
"He really liked Philadelphia. I remember hearing that. The word on the street was that (the trade) stunned him, that he really liked that environment," Cashman said. "And I think that the fact he's going to Philadelphia proves how much he really enjoyed Philly."
Texas all but said Lee would have stayed if the Rangers had offered a seven-year agreement. The Rangers' best offer was $138 million over six years, with an option for a seventh season that could have become guaranteed.
"There was a lot of back and forth. There was a point at which they said if you will do 'X', we would agree to terms," Rangers managing partner Chuck Greenberg said. "Those terms went beyond the parameters that we were comfortable with, specifically in years."
While Lee left $30 million on the table, it's not like he's playing for the minimum. He received the sixth $100 million contract for a pitcher, trailing the deals of Sabathia ($161 million for seven years), the Mets' Johan Santana ($137.5 million for six seasons), the Giants' Barry Zito ($126 million for seven years) and Mike Hampton ($121 million for eight years), and topping Kevin Brown's $105 million, seven-year contract.
Gene Orza, the union's outgoing chief operating officer, said the image of free agents seeking every possible dollar is wrong.
"I think people underestimate the frequency players take less money to go someplace where they're comfortable," he said. "I know nobody want to hears this because it doesn't suit their prejudices, but in fact there's a whole slew of considerations: what the schools are like, who your friends are, who your wife's friends are, pennant-winning chances, farm system. There's a whole bunch of things people consider. So I'm not surprised in the slightest that he chose someplace that offered him less money than another. I think that happens quite frequently in this sport, more than people care to know."