Mitchell, 25, cleared waivers and was optioned to Tacoma, where he went 3-2 with a 2.96 ERA in eight starts after being acquired from the Yankees along with reliever Danny Farquhar in the Ichiro Suzuki trade on July 23.
Mitchell appeared in four games for the Yankees last season, posting a 3.86 ERA with two runs in 4 2/3 innings of relief. He also went 6-4 with a 5.04 ERA in 15 games (14 starts) for Scranton/Wilkes-Barre, the Yankees' Triple-A club.
The 6-footer out of Clemson was a 10th-round Draft pick of the Yankees in 2008 and has been a starter throughout his four seasons in the Minors.
Farquhar, the other pitcher acquired in the Ichiro deal, also remains in the organization and went 1-0 with a 0.54 ERA and four saves in 12 relief appearances for Tacoma last season. The 25-year-old right-hander has pitched well for Lara in the Venezuelan Winter League as well, going 2-1 with a 1.50 ERA and three saves in 21 appearances.