An arthroscopic debridement procedure is scheduled for next week, Yankees general manager Brian Cashman said.
The Yankees expect the veteran to be recovered in time for spring training next year.
For now, Sabathia will not undergo microfracture surgery on the knee, which if needed could end his career.
"It doesn't mean that is off the table," Cashman said.
The 33-year-old Sabathia posted a 3-4 record with a 4.29 ERA this season.
The Atlanta Braves released struggling second baseman Dan Uggla.
The Braves will be responsible for approximately $19 million Uggla is owed through the end of 2015.
Atlanta acquired Uggla in a November 2010 trade with the Miami Marlins and signed the three-time All-Star to a five-year, $62-million deal just prior to the 2011 season.
The 34-year-old Uggla has filled a limited reserve role this season since losing his starting job in May. Last weekend, he arrived 30 minutes before the start of a game at Wrigley Field and was suspended by the team for Sunday's game.
Uggla finished his time with the Braves with a cumulative .209 batting average, 79 home runs, 225 RBIs, a .317 on-base percentage and 535 strikeouts.
The Braves recalled infielder Tyler Pastornicky from Triple-A Gwinnett to take the roster spot.
San Francisco Giants pitching coach Dave Righetti was hospitalized in Las Vegas but was in good condition after suffering from vertigo during a team flight to Miami on Thursday night.
The team charter made an unscheduled landing in Las Vegas after Righetti, who had been battling a virus, was stricken while in the air. He was expected to be released Friday.
Team spokesman Matt Chisholm said Righetti's wife arrived in Las Vegas to be with him and they will return to San Francisco when he is cleared to fly. Righetti could rejoin the Giants next Friday when they return home from a road trip.
The Tampa Bay Rays are interested in young pitcher Taijuan Walker and at least two other players in trade talks with the Seattle Mariners involving left-hander David Price, according to CBSSports.com.
The Mariners want Price and/or second baseman Ben Zobrist from the Rays.
Price, who leads the American League with 164 strikeouts, is 9-7 with a 3.23 ERA this season, may be on the trading block for young talent.
The Philadelphia Phillies, 10 games out in the NL East, are more interested in trading left-hander Cliff Lee than fellow lefty Cole Hamels, according to CBSSports.com.
One rival general manager said a deal is not possible now since Lee is sidelined with an elbow injury. However, he is expected back soon and could be showcased for teams interested in acquiring him once he returns.
Lee is 4-4 with a 3.18 ERA this season. He has at least $48 million left on his contract that ends in 2015. However, a 2016 option could make his remaining deal worth up to $63 million.
The Phillies reportedly are asking a lot for Hamels, who is 3-5 with a 2.93 ERA. He is on a six-year, $144 million contract.
Miami Marlins right-hander A.J. Ramos, who had not pitched since June 26 due to right-shoulder inflammation, was activated from the disabled list prior to the game.
The Marlins placed right-hander Kevin Gregg (right-shoulder inflammation) on the 15-day disabled list retroactive to July 14.
Cincinnati Reds infielder Skip Schumaker remained on the seven-day concussion disabled list after thinking he would be able to return.
Pittsburgh Pirates right-hander Gerrit Cole, who has been on the disabled list since July 5 with a strained right lat, said he has been throwing pain-free, including a 30-pitch session Wednesday that marked his first time on the mound since being injured.
(Editing by Larry Fine)