"It was what I set out in the spring to do," Hughes said after manager Joe Girardi announced the decision. "I grew up a starter in high school, minor leagues, even my first couple partial seasons in the big leagues. It was something that I really wanted and I feel like I'm ready for the challenge and ready for the season that lies ahead. "
Girardi said Chamberlain will be given an opportunity to pitch out of the bullpen and is in the mix for the eighth-inning setup role for closer Mariano Rivera.
Chamberlain was at the Yankees' complex about an hour before Girardi announced the winner and said "You go with the flow. That's what I've done."
Hughes and Chamberlain spoke briefly at Steinbrenner Field.
"He just said 'congrats,'" Hughes said. "I think we all trust in the front office and the coaching staff to make the right decisions. We just get paid to go out and throw the ball. There's no bitterness or anything like that. We're all pulling for the same goal, to do what we did last year. The roles might be switched but we're pulling for each other."
Hughes made seven starts at the beginning of last season, then was moved to the bullpen after Chien-Ming Wang got hurt. Chamberlain was in the rotation during the regular season, then was shifted in the postseason to the relief role, which appeared to suit him better.
The other contenders were Sergio Mitre, Alfredo Aceves and Chad Gaudin, released earlier Thursday.
"I felt like everyone had been given an equal opportunity," Hughes said.
Gaudin, who turned 27 on Wednesday, will receive $725,410 in termination pay rather than the non-guaranteed $2.95 million salary he and the team agreed to in January to avoid salary arbitration.
New York acquired Gaudin from San Diego in August for cash, and he went 2-0 with a 3.43 ERA in six starts and five relief appearances for the Yankees last season. He was on the roster for all three rounds of the postseason but appeared in just one game, a one-inning relief appearance against the Los Angeles Angels in the AL championship series.