NEW YORK, JUNE 6 -- Slugger Jack Clark signed a two-year contract with the New York Yankees today, becoming the first major free agent to sign with the Yankees since baseball owners began exercising financial restraint in the winter of 1985.

New York, which once led the way in signing free agents like Reggie Jackson, Dave Winfield and Goose Gossage, will pay Clark a reported $1.5 million for each year of the contract, plus incentives.

Clark, one of baseball's most feared hitters, recently rejected salary arbitration from the St. Louis Cardinals, who belatedly offered a similar, $3 million, two-year contract after learning of the Yankees' interest.

Clark said that, had the Cardinals made that offer sooner, he would have stayed in St. Louis. But, Clark said, "It was too late.

"I had a better offer from St. Louis for the money, but this is where the deal was," Clark said. "I came here essentially on a handshake."

The 32-year-old Clark missed the last five weeks of the 1987 regular season, as well as the playoffs and World Series for the National League-champion Cardinals, because of an injured ankle.

With Don Mattingly the Yankees' every-day first baseman, Clark will probably be the designated hitter. He hit 35 home runs with 106 runs batted in while batting .286 in 131 games last season. He led the National League with a .597 slugging percentage.

The Cardinals acquired Clark from San Francisco prior to the 1985 season and he led the team to the NL championship that year. He began his career with the Giants in 1975.