NEW YORK — Tom Gordon is replacing Billy Wagner as the Philadelphia Phillies' closer, leaving the New York Yankees to pursue Kyle Farnsworth as Mariano Rivera's setup man.

Gordon and the Phillies reached a preliminary agreement Thursday night on an $18 million, three-year contract

Philadelphia spokesman Larry Shenk confirmed there was a tentative deal, and the terms of the contract were disclosed to The Associated Press by two people familiar with the negotiations who spoke on condition of anonymity because the deal had not been finalized yet.

Gordon's agreement is pending a physical, and he is likely to take one Saturday.

A few days after refusing to offer a four-year contract to the 34-year-old Wagner, the Phillies wound up giving a three-year deal to the 38-year-old Gordon.

He went 5-4 with a 2.57 ERA and two saves for the Yankees last season, striking out 69 batters in 80

innings. He allowed eight homers, his most since 1997 — when he gave up 10 while splitting the season between Boston's bullpen and starting rotation.

Prices for relievers have escalated, with B.J. Ryan getting a $47 million, five-year contract from Toronto and Wagner accepting a $43 million, four-year offer from the New York Mets.

Texas emerged as the Yankees' chief competitor for Farnsworth, who likely will command $17 million to $19 million over three years.

Braves general manager John Schuerholz said a representative for Farnsworth called him Wednesday night and said the right-hander would not return to Atlanta and would sign with the Yankees.

"That is accurate, that's what we were told," Schuerholz said Thursday, confirming remarks he made a day earlier to The Atlanta Journal-Constitution. "We received a call yesterday and, cut and dried, that's what was said. That's all I'll say about it."

But the Rangers were told Thursday that they remain in contention, a baseball official said, speaking on condition of anonymity because the negotiations were ongoing.

"We've got multiple free-agent offers out there that we're hoping to have answers on sooner than later, but I'm not certain that those will come to a head by the end of (next) week," Rangers general manager Jon Daniels said, without mentioning specific players.

Farnsworth's agent, Barry Meister, declined to comment on Schuerholz's remarks

In San Diego, the Padres finalized their $30 million, three-year contract to keep right fielder Brian Giles.

"I'm happy to be in San Diego," said Giles, who grew up in suburban El Cajon and was acquired from Pittsburgh late in the 2003 season. "As a little kid growing up, you always think about playing in your hometown. I was fortunate enough to do that for two years, and hopefully, for four more years."

The two-time All-Star will earn $9 million per season from 2006-08, with a $9 million club option for 2009 that could raise the value of the deal to $36 million over four years. The team has a $3 million buyout for 2009.

As one of the top outfielders on the free-agent market, Giles attracted strong interest from the New York Yankees, Toronto, Cleveland — where he broke into the majors in 1995 — and the rival Los Angeles Dodgers. The Dodgers are thought to have offered $34.5 million for three seasons.

"Obviously, there were other deals out there," said the 34-year-old Giles, the most consistent offensive player for a team that won the NL West with only 82 wins. "But I wanted to make a deal here."

Reliever Tim Worrell returned to San Francisco, agreeing to a $4 million, two-year contract with the Giants.

Worrell, who pitched in San Francisco from 2001-03, spent the past two seasons in Philadelphia and Arizona. He had a strong finish to 2005, going 1-0 with a 0.90 ERA in his last 18 outings for the Diamondbacks.

He missed two months earlier in the season when he was placed on the disabled list with what he called "personal psychological issues."

"We scouted Timmy very heavily last season and his final stretch showed us that he's still capable of pitching the way he did when he helped us to a World Series and an NL West championship," Giants general manager Brian Sabean said. "He's certainly a known commodity for us and a solid veteran presence for our bullpen."

Meanwhile, Rafael Furcal's agent said the Braves remain in contention to keep the shortstop, who also is being courted by the Chicago Cubs and Los Angeles Dodgers.

Paul Kinzer, who represents the free agent, said negotiations are ongoing with all three teams. Cubs general manager Jim Hendry met with Kinzer and Furcal in Atlanta on Sunday, and Kinzer met again with Braves officials Wednesday.

"We're going to talk more," Kinzer said of the negotiations with the Braves.

"I'm based out of Atlanta. I'd love to keep him here," Kinzer said. "Ultimately it's going to be his decision. There has not been a decision made."