HOUSTON -- Any hopes Astros fans had of Lance Berkman returning to Houston to finish his career were ended on Saturday, when the slugger told MLB.com he had agreed to a one-year contract for $11 million with a vesting option and a $1 million buyout for 2014 to become the designated hitter for the Texas Rangers.

Berkman, who played for the Astros from 1999 until being sent to the Yankees at the Trade Deadline in 2010 and for the Cardinals the previous two seasons, was mulling retirement before the Rangers made him an offer he couldn't refuse. He'll remain in the Astros' division -- the American League West -- and the teams will meet on Opening Day in Houston on March 31 on ESPN.

The Astros had several conversations about bringing Berkman back, but he said Saturday a formal offer had never been made and that Houston wasn't quite the right fit. Houston signed Carlos Pena to be its DH last month.

"I have nothing but good things to say about the Astros organization and the way our negotiations went," Berkman said. "I understand they're in a position they have a lot of young players they'd like to get Major League experience -- and with the signing of Carlos Pena, that kind of takes care of their DH spot. The fit wasn't quite right, but I still harbor an extreme amount of good will toward the Astros organization, and I hope to continue that relationship on down the road."

In November, Berkman initiated a meeting with Astros owner Jim Crane to talk about the team and get to know each other better. He also had lunch with new manager Bo Porter and had some recent conversations with general manager Jeff Luhnow.

"We talked general range, but they never said, 'Hey, we'll give you X,'" Berkman said. "I met with Bo Porter and met with Mr. Crane and talked with Mr. Luhnow several times on the phone. We kind of talked parameters, but it never really got past the tire-kicking phase.

"They were very candid and very honest [with me about] what their goals were as an organization. With where they're at and what they have planned with their young guys, it didn't make a whole of sense to get to the Rangers' level financially. I understand that and I feel nothing but good things towards the Astros organization."

Berkman said the bum knee that limited his playing time last season has healed enough to where he believes he can provide solid production from the DH spot this year. But there were several things that drew him to Arlington.

"One is the opportunity to DH," Berkman said. "I think that's going to be really good for me from a physical standpoint, in terms of staying healthy for a full year, and obviously geography. I'm a Texas guy all the way, so I could get back to my home state -- and being close to home is huge for me and my family. I think the Rangers have an excellent chance to win. I think they have a very solid team, so all those things kind of add up and it makes a lot of sense."

Berkman, who turns 37 on Feb. 10, was considering retirement after an injury-plagued 2012 with the Cardinals. He underwent two surgeries on his right knee and played 32 games, hitting .259 with an .826 OPS, two home runs and seven RBIs. Berkman appeared in only six games (two starts) after July 29, and was left off St. Louis' playoff roster.

"In my mind, I was retired," Berkman said. "I really felt like I wasn't going to play, and then as I got further into the offseason my knee started to feel better, and the Rangers made me a real strong offer. That sort of got my interest piqued, and it just kind of went from there.

"I'm glad that they reached out to me when they did and it kind of worked out. I always told myself I was going to leave the possibility of returning open and let the Lord dictate whether it was time or walk away or there was an opportunity that made sense to keep going. Obviously, this is an opportunity that made a lot of sense."