Update 12/18 11:39am PST: Buster Olney of ESPN Tweets:  Nick Johnson will make $5.5 mill in 2010, plus PA-based incentives, and has a 2011 mutual option for $5.5 mil; oth sides have to activate.

Update 20:00 PST: Tyler Kepner of the New York Times quotes Damon in his Tweet:  Johnny Damon on Yankees: “It’s part of baseball. Teams try to make moves in hopes to improve their club. I wish them all the best.”

Update 17:18pm PST: Jon Heyman of SI.com reports The Yankees would use Johnson as a DH and occasional first baseman if the contract can be completed. It is expected to pay him at least $5 million.  He goes on to say that Johnny Damon’s chances to return to the Yankees will be severely diminished.

Update 16:13pm PST: KenDavidoff of NewsDay Tweets:  #Yankees and Nick Johnson are wrapping up a one-year deal for about $5.5 million. Pending a physical.

Update 15:18pm:  KenDavidoff of NewsDay Tweets:  The #Yankees and Nick Johnson are engaged in serious discussions, but Johnson hasn’t taken a physical exam yet.

Update 10:57am:  Ken Rosenthal of Fox Sports reports, “the Giants have increased their offer and the Mariners remain in the mix, according to a major-league source.”  The Giants, too, are offering one year, but have raised their offer to the $5.5 million to $6 million range, the source said.  The Mariners also want to sign Johnson for one year, but the level of their financial interest is not known. Johnson would prefer a two-year deal.

George A. King III, of The New York Post, quoted Nick Johnson’s agent Rex Gary when commenting on his talk with the New York Yankees, “We have had dialogue, things are moving forward.  Something could happen to speed things up, but it’s hard to predict.”

Jon Heyman, of SI.com, Tweets:  “nick johnson talk “real,” i’m told. .425 OBP. plus, nice of #yanks to consider the infirmed”

It was rumored last week that Johnson was offered a contract by the San Francisco Giants.  Johnson, 31, hit 8 home runs, drove in 62 RBIs, hit .291 and had a .426 OBP with the Marlins in 2009.  He earned $5.5 million last season in the final year of a three-year $16.5 million deal.  Johnson began his career in 2001 with the Yankees.  After the 2003 season, he was traded with Juan Rivera and Randy Choate to the Montreal Expos for Javier Vazquez.  You can read Nick Johnson’s complete statistics here.