Luetge, 24, also had a good spring (2.70 ERA in 6 2/3 innings in six games) and would have had to be offered back to the Brewers if he was not kept on the 25-man roster. He'll team with George Sherrill as the squad's lefty relievers to start the season.
"This is a young man who came here as a Rule 5 and was very impressive, not just his ability with left-handers but his ability with right-handers," said manager Eric Wedge. "He earned his spot on the ballclub."
Furbush is a former starter who is capable of pitching in long relief, but the club has right-handers Hisashi Iwakuma and rookie Erasmo Ramirez who are capable of pitching in that role as well.
The decision with Peguero means Seattle will go with three full-time outfielders as well as utility man Chone Figgins for the start of the season, with Mike Carp on the disabled list until at least April 13 with a sprained right shoulder.
Figgins has been playing left field since Carp's injury in the Opening Day game in Tokyo.
If Figgins plays in the outfield, that allows Kyle Seager, who had a strong spring (.362 with four home runs) to play third base. The Mariners also kept rookie Alex Liddi, who can play first or third, as well as new Japanese utility player Munenori Kawasaki.
Wedge said Liddi helped himself with a strong spring.
"He had a tremendous camp," Wedge said. "We're able to move him to first as well as third base. You look at his right-handed bat, and his development, how much better he is this year versus last year."
Here's the final 25-man roster heading to Oakland, where Seattle will play Friday and Saturday before heading to Texas:
Starting pitchers: Felix Hernandez, Jason Vargas, Hector Noesi, Blake Beavan, Kevin Millwood.
Bullpen: Brandon League, Tom Wilhelmsen, Sherrill, Steve Delabar, Ramirez, Iwakuma, Luetge.
Catchers: Miguel Olivo, Jesus Montero, John Jaso.
Infielders: Justin Smoak, Dustin Ackley, Brendan Ryan, Seager, Kawasaki, Liddi.
Outfielders: Ichiro Suzuki, Michael Saunders, Figgins, Casper Wells.
Disabled list: Franklin Gutierrez, Carp, Adam Moore.