The Reds and Homer Bailey have avoided arbitration by agreeing to a one-year, $5.35 million contract.
Bailey had initially filed a request for $5.8 million. The Reds countered at $4.75 million during the arbitration process last month.
The 26-year-old right-handed pitcher was in his second year of arbitration eligibility and is scheduled to reach free-agency after the 2014 season.
Reds general manager Walt Jocketty plans to revisit the idea of a multi-year deal with Bailey at some point.
Bailey went 13-10 with a 3.68 ERA last year in 33 starts.