Pavano has spent the last year-and-a-half in the Twin Cities after being acquired from the Cleveland Indians in 2009.
Last season Pavano stepped up as a top-of-the-rotation starter for the Twins, going 17-11 with a 3.75 ERA.
Pavano, a Type-A free agent, declined arbitration from the Twins and would give them two compensation draft picks in the 2011 MLB draft should he depart.
It comes as something of a surprise that the Twins are such heavy players in re-signing Pavano. They already have Liriano, Baker, Blackburn, Slowey and Duensing under contract for next season. The Twins also have Kyle Gibson waiting in the minors for an opportunity.
Pavano should be able to demand close to $10 million per season on his new contract. What may be a sticking point for the Twins is the third year that Pavano wants. If Pavano is willing to accept a two-year deal, the Twins should pull the trigger.
This signing may allow them to package a couple of their other starters, and possibly make a bigger splash with a trade. Zack Greinke is a possibility—though not a likely one, as Kansas City is unlikely to trade within the division.