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12/16/10 3:43 PM EST

Blue Jays sign Encarnacion to one-year deal

TORONTO -- The Blue Jays brought back a familiar face to fill their hole at designated hitter by signing Edwin Encarnacion to a one-year, $2.5 million contract Thursday morning.

The Dominican native hit .244 with 21 home runs and 51 RBIs in 332 at-bats last season with Toronto. A variety of injuries limited his playing time to just 95 games last season, but he managed to average a home run every 15.8 at-bats.

"We always felt there was potential to Edwin's bat," Blue Jays general manager Alex Anthopoulos said. "We think now being completely healthy going into next year and getting everyday at-bats ... he can be a pretty impactful bat in our lineup, and we think there is a lot of upside to him going forward."

Encarnacion spent his entire 2010 campaign at third base but committed 18 errors, mostly because of an erratic throwing arm. The Blue Jays do not plan on using him at that position again unless it's a situation where he is temporarily filling in for someone.

Instead, Encarnacion is expected to get the majority of his playing time at DH while backing up Adam Lind at first base. Lind appeared in just 11 games at first last season, but the Blue Jays would like to experiment with him at the position next year.

If, for some reason, that doesn't work out, then Anthopoulos feels Encarnacion would be capable of taking over. Toronto's GM talked with new manager John Farrell and third-base coach Brian Butterfield prior to the signing, and the group thinks that Encarnacion has the strong hands and range it will take to succeed.

"We feel pretty confident that he will be able to do a solid job at first," Anthopoulos said of Encarnacion, who has appeared in just two Major League games as a first baseman in his career. "It's a nice insurance and allows us to break in Adam Lind. But it also makes sure that we get a quality bat. Power in the game today is really on the decline ... You talk about him getting 500 or 600 at-bats, and we don't think it's a question at all for him to get 30 home runs."

The deal, which also includes a club option in 2012 for $3.5 million, is yet another twist in Encarnacion's tumultuous tenure with the Blue Jays.

The 27-year-old was designated for assignment by the club in June, but he was not claimed on waivers by another team and was optioned to Triple-A Las Vegas. He returned to Toronto two weeks later and would remain with the club for the remainder of the season.

Following the 2010 campaign, Encarnacion was claimed on waivers by Oakland on Nov. 12. The Athletics opted not to tender him a contract on Dec. 2, making him a free agent.

Encarnacion would have been in line for a raise on the $4.75 million he made in 2010 if he had been offered arbitration.

"We were hoping to do better at third base," Anthopoulos said. "I think us allowing him to be cut loose and test free agency sooner rather than later, I think he felt as though the market for him was going to be in the first-base/DH area and his value was going to be tied up in his bat. We needed to give him some time and needed to allow him to explore the market, but we maintained dialogue throughout."

The 6-foot-2, 231-pound infielder was originally acquired from the Reds as part of a deal that sent third baseman Scott Rolen to Cincinnati prior to the non-waiver Trade Deadline in 2009. In 652 career games, the right-handed-hitting Encarnacion has posted a .258 average, with 100 home runs and 337 RBIs.

It remains to be seen what the signing means for the Blue Jays' situation at third base. The club has Jose Bautista, who bashed a Major League-leading 54 homers last season, under control for 2011, but his preference is to play right field. Toronto could still opt to move him into the infield or acquire another player to fill the void at the hot corner.

"Right now, Jose Bautista, without adding anybody else, is a guy that can play there, but we haven't made any determinations," said Anthopolous, who has the luxury of being able to start Rajai Davis in the outfield if Bautista were to switch positions.

"We're not prepared to make a determination yet as to who's playing third base, but we know we have the roster flexibility ... so we're really keeping our options open at this point."

Gregor Chisholm is a reporter for MLB.com. Read his blog, North of the Border, and follow him on Twitter @gregorMLB. This story was not subject to the approval of Major League Baseball or its clubs.