Capps can earn an additional $425,000 in performance bonuses for games finished under the deal, which was reached about 12:30 a.m. The pitcher’s agent, Paul Kinzer, said the agreement is subject to a physical that will take place in the first week of January.

"This was the opportunity for him to be a closer and he decided the wanted to stay in that role," Kinzer said.

The 26-year-old Capps became a free agent this month when the Pirates decided not to offer him a contract for 2010. The right-hander earned 27 saves last season, while going 4-8 with a 5.80 ERA. He struck out 46 batters in 54 1-3 innings.

Kinzer said the bidding lasted through Wednesday night and that Capps turned down a two-year offer from the Nationals, believing he will have a good season and put himself in position for a higher 2011 salary. While Washington was the favorite, other teams also tried to sign Capps.

"There also was the Cubs," Kinzer said. "The Mets expressed some interest, but it was very late. We very down the road with it, and it would have been a setup role, too."

Capps made his major league debut in 2005 and has career totals of 67 saves, a 19-19 record and 3.61 ERA, all with the Pirates. He would start earning his bonuses with 40 games finished and would get the full amount with 65.

He gives the Nationals an experienced closer as they work to rebuild a bullpen that was among the team’s biggest problems in 2009, when Washington finished 59-103, the worst record in the majors. It was the second consecutive year that the Nationals lost more than 100 games.

Mike MacDougal was signed in May and finished the season as Washington’s closer, getting 20 saves and going 1-1 with a 3.60 ERA. But the Nationals did not offer him a contract for next season.

Instead, general manager Mike Rizzo has set out to rebuild the bullpen, trading for New York Yankees relief pitcher Brian Bruney and now bringing aboard Capps.

Those are part of a busy offseason that also has included this week’s signing of free-agent starting pitcher Jason Marquis to a $15 million, two-year contract, and the earlier $6 million, two-year deal given to free-agent catcher Ivan Rodriguez.

The Nationals also have an agreement on a minor league contract with reliever Eddie Guardado, who would get a chance to make the team in spring training.

The 39-year-old left-hander known as "Everyday Eddie" appeared in 48 games for the Texas Rangers last season, going 1-2 with a 4.46 ERA. Guardado has 187 saves in a career that began in 1993.

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AP Sports Writer Ronald Blum in New York contributed to this report.