Liriano's pact became official when he passed the requisite physical earlier Friday.
To accommodate Liriano on their 40-man roster, the Pirates outrighted right-hander Vin Mazzaro to Triple-A Indianapolis, while concurrently extending to him an invitation to big league Spring Training.
Pittsburgh general manager Neal Huntington and Greg Genske, Liriano's agent, worked long and hard to come to an agreement after the pitcher's injury clouded the original accord.
"We are excited to add Francisco Liriano to our roster," Huntington said. "Francisco is recovering from his right arm injury and we look forward to him joining our rotation once he is ready to go."
The terms of the contract offer the club protection in the event the fracture, of the southpaw's right humerus, renders him unavailable for an extended period. Conversely, Liriano has protection if he is fit to pitch through the injury. All of the incentives are based on time spent on the active roster.
In addition to his $1 million guarantee, Liriano can earn an additional $3.75 million in 2013 based on the number of days he is not on the disabled list due to the right arm injury.
The 2014 club option is for $8 million, but it becomes a vested option at any of three levels -- $5 million, $6 million or $8 million -- based on the number of days he is not DL-ed in 2013 due to the right arm injury.
If the 2014 option does vest at $5 million or $6 million, however, Liriano would still be able to reach the $8 million with bonuses based on games started in 2014.
The Pirates see a considerable upside in Liriano, who went 6-12 with a 5.34 ERA while splitting last season between the Twins and the White Sox. He is only 29, and over the last three seasons ranked fifth among American League southpaws with 480 strikeouts. Even in 2012, his 9.59 strikeouts per nine innings was the third-best rate among AL pitchers who worked at least 100 innings.
Liriano already has one Comeback Player of the Year Award in his collection, earning that honor in 2010, when he went 14-10 in Minnesota following a 5-13 slide the season before.