New York ? Manager Joe Torre and the New York Yankees agreed Friday to a $19.2 million, three-year contract extension through 2007, reaching the deal a season after his relationship with owner George Steinbrenner soured so much that it threw his future in doubt.

“I’m glad to be back,” Torre said before the Yankees played the Chicago White Sox. “Last year, I wasn’t sure during the course of the year if the Yankees had had enough of me.”

Torre, 63, will remain as a consultant to the Yankees for up to six years after he’s finished managing. As for retiring after 2007, “I’m guessing I will, but I’m sure we’ll talk.”

The Yankees have reached postseason play in all eight seasons under Torre, advancing to the World Series six times and winning four championships. Torre, in the final season of a $15 million, three-year deal, gets $6.1 million in both 2005 and 2006, and $7 million in 2007.

“Joe Torre is a native New Yorker with all the mental toughness that New Yorkers possess,” Steinbrenner said in a statement. “He’s part of the family and I’m very happy that he will finish his career as a Yankee.”

Several Yankees gathered around a television set in the clubhouse lounge to watch the announcement.

Derek Jeter, who still calls his manager “Mr. Torre,” was thrilled to see the deal get done.

“I couldn’t imagine him not being here,” Jeter said.