updated 9:18 a.m. ET Dec. 24, 2008

NEW YORK - Even in the midst of a recession, the New York Yankees’ hoard of cash — and players — appears to have no limit.

Keeping up an unprecedented spending spree, Mark Teixeira joined the collection of pricey free agents in the Bronx when the first baseman reached a preliminary agreement on a $180 million, eight-year contract with the Yankees.

Two people familiar with the negotiations disclosed Tuesday’s agreement, which is subject to a physical. They spoke to The Associated Press on condition of anonymity because the deal was not yet final.

With Teixeira’s deal, the Yankees have lavished $423.5 million on three new players, a figure dwarfing the economic might of the other 29 clubs. Just last Thursday, the Yankees completed agreements with two prized pitchers, giving CC Sabathia a $161 million, seven-year contract and A.J. Burnett an $82.5 million, five-year deal.

“They have the revenue sources that most don’t have, and they have a lot of money coming off the books this season,” said Los Angeles Angels general manager Tony Reagins, who had hoped to retain Teixeira. “So if they’re willing and able to spend, I’m pretty sure they’ve made some good investments.”

As is their custom, the Yankees refused to publicly acknowledge the agreement because it had not yet been finalized. General manager Brian Cashman met with Teixeira and his agent, Scott Boras, in the Washington area on Dec. 4 and impressed the player with models of the new Yankee Stadium, according to one of the people familiar with the talks.

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Early Tuesday, after midnight New York time, Cashman received a telephone call from Boras stating that Teixeira’s preference was to play for the Yankees, the person said. While the Boston Red Sox had also pursued Teixeira, offering an eight-year deal worth about $170 million, New York is closer to the player’s family in Maryland.

Boras came off his demand for a 10-year contract later in the day, the person said, and the deal was agreed to.

The Baltimore Orioles and Washington Nationals also made big offers to Teixeira, but they appear to have little chance of winning in the next few years. The Angels, who obtained Teixeira from Atlanta on July 29, pulled their eight-year offer last weekend.

In the end, the Yankees were helped by geography and the likelihood they will contend for the postseason each year.

“You just want to wish the player well and you hope he made the right choice for him and his family,” Reagins said. “At the end of the day, I think he wound up where he wanted to be.”

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Preparing to move into their $1.3 billion ballpark, the Yankees will hold the four largest contracts in baseball as they try to win the World Series for the first time since 2000. Third baseman Alex Rodriguez has the sport’s highest deal at $275 million over 10 years, and shortstop Derek Jeter is second at $189 million over 10 years.

Teixeira’s agreement came just one day after the Yankees received a $26.9 million luxury tax bill for 2008, when their streak of 13 consecutive playoff appearances ended. But with the revenue from their new stadium, where tickets are priced at up to $2,500 per game, their appetite for free agents wasn’t diminished.

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