In addition to Gagne, the Dodgers optioned pitcher Scott Elbert and reassigned pitcher Scott Dohmann, outfielder Michael Restovich and infielder John Lindsey. Elbert had been in the running for the fifth starter job, but had been hampered by a sore shoulder early in camp and a 20.25 ERA more recently.
The Dodgers also returned left-handed Rule 5 pick Armando Zerpa to the Boston organization.
After their 4-0 victory over the Angels in Tempe, Ariz., on Monday, the Dodgers made four additional camp cuts. Right-hander Travis Schlichting, lefty Brent Leach and infielder Ivan De Jesus Jr. were optioned to the Minor League camp. Reassigned to the Minors camp was infielder Argenis Reyes, a non-roster invitee.
In a text message, Gagne said he would accept the Minor League assignment as part of the comeback process.
"I'm on my way back," he wrote. "I knew it wasn't gonna be easy. But I'm gonna go down there and work my butt off and be ready if they need help!! Long season."
Dodgers general manager Ned Colletti, who admitted to a "sentimental" element in bringing back the one-time dominant "Game Over" closer, was in accord with that assessment.
"Gagne needs innings to build up his arm strength, and to get back the feel of his changeup," Colletti said in Tempe, Ariz., where the Dodgers were meeting the Angels in Cactus League play. "From here on out, those innings weren't going to be there for him in the big league camp."
Colletti had joined manager Joe Torre and pitching coach Rick Honeycutt in delivering the news, and the options, to Gagne.
"We asked him, 'What do you want to do?' He said he wanted to continue with us, if we still had interest, which we do," Colletti said. "He knows where he's at. He feels fine physically.
"No one knew what to expect. With him pitching in the Canadian League last year, we knew it was a long shot. But we felt it was worth it. Nothing ventured, nothing gained."
Colletti confirmed that Gagne's Minor League deal includes an opt-out clause if he is not added to the Major League roster by Opening Day, April 5.
"That would be his choice," Colletti said.
Gagne said he's looking forward to pitching again in Dodger Stadium.
Gagne, 34, was the greatest closer in Dodgers history and a fan favorite, a Cy Young winner in 2003, a three-time All-Star and holder of baseball's all-time record of 84 consecutive save conversions.
He single-handedly disrupted the traditional tendency of Dodgers fans leaving home games early to avoid traffic, as they preferred to stay and watch "Game Over" Gagne, who entered the field to the blaring sound of Guns N' Roses' "Welcome to the Jungle."
But his career spiraled beginning with elbow surgery in 2005, then another elbow operation and back surgery in 2006, after which he left the Dodgers as a free agent. In 2007 Gagne was linked to performance-enhancing drug use when named in the Mitchell Report.
Gagne made stops in Texas, Boston and Milwaukee after leaving Los Angeles. After pitching for the Brewers in 2008, he was released during Spring Training of 2009 with a slight tear in his rotator cuff that he rehabbed without surgery.
Last year he played for the Quebec Capitales of the independent Can-Am League as a starting pitcher/coach. In 17 starts, he went 6-6 with a 4.65 ERA and 64 strikeouts in 102 2/3 innings. Gagne originally was a starter for the Dodgers before moving to the bullpen in 2002.
Gagne had made three Spring Training appearances for the Dodgers, allowing six runs on eight hits in 2 2/3 innings for a 20.25 ERA. He came to camp on a Minor League contract for a $500,000 base salary.
Sunday night, the Dodgers reassigned pitchers Kenley Jansen and Fernando Felix, catcher Gabe Gutierrez and outfielder Brian Barton.
The moves leave the Dodgers with 51 players in the Major League camp.