Mills pitched in 72 games for the Baltimore Orioles last season, going 3-4 with a 3.74 ERA and two saves. He has a 31-26 career record with a 3.90 ERA and 13 saves.
"We acquired one of the premiere setup men in baseball today with the signing of Alan Mills," Dodgers general manager Kevin Malone said in a press release. "He is a proven and experienced reliever with quality pitches who thrives on situations with the game on the line. "
"With Jeff Shaw, Mel Rojas, Antonio Osuna and now Mills, we are as strong as we can be right-handed in the bullpen."
Malone was the assistant general manager for the Orioles before taking the Dodgers' GM job on Sept. 11, and new Dodgers manager Davey Johnson was Baltimore's manager in 1996-97.
Malone had said improving the bullpen was a top priority, and since the end of the season, the Dodgers locked up Shaw, their closer who could have demanded a trade, and added Rojas and now Mills.
Rojas came in a trade with the New York Mets for third baseman-outfielder Bobby Bonilla earlier this week.
"I'm excited about being reunited with Kevin Malone and Davey Johnson, who are working hard at putting together a championship team," Mills said. "I know what (Johnson) can do as a manager and he knows what I can do as a reliever."
Mills is the second free agent to sign with the Dodgers, joining outfielder Devon White, who played for World Series-winning teams in Toronto and Florida. Mills, who made $1 million this season, gets $1.25 million next season, $2.25 million in 2000 and $3 million in 2001.
In addition, the Dodgers and 26-year-old infielder Juan Castro agreed Thursday on a $725,000, two-year contract that pays him $325,000 next season and $400,000 in 2000. Castro hit .195 in 89 games las season.
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