Jordan Bastian has all the relevant details:
Cleveland manager Terry Francona and general manager Chris Antonetti called a meeting with Matsuzaka on Monday and expressed their desire to keep the right-hander in the organization. Matsuzaka has accepted an assignment with Triple-A Columbus, but there are still steps left in the process to make it official.
The reason why these things are happening is because of a new part of the CBA. Matsuzaka qualified as a XX(B) free agent this winter, which simply means that he had 6 years of service time and ended the season on a major-league roster. That group included Josh Hamilton, Nick Swisher, Zach Greinke, and all the free agents that signed multi-million deals.
However, if one of those free agents end up signing a minor-league contract, they have three clauses automatically inserted into their contract:
1) he must be told five days prior to Opening Day—that's March 26 this year—whether or not he will make the 25-man active roster, 2) if he does not ask for his release and consents to open the season in Triple-A, then he will receive a $100,000 "retention bonus," and 3) if he's still in Triple-A on June 1, then he can opt out of his minor league contract so that he can sign with another organization.
These perks allow a player some time to catch on with another club if they don't make an Opening Day roster, and means that they don't have to accept an assignment to the minors. If they did accept an assignment, they would get a six-figure bonus, a rather nice parting gift. So Daisuke could have elected to try to catch on somewhere else, and probably would have gotten some interest if only based on his history. Perhaps Matsuzaka realized that trying to force himself onto a major-league roster without being able to go 80 or more pitches would be counterproductive, but then again, he could have signed elsewhere with a clause that allowed him to get stretched out in the minors first.
Besides working his pitch count up, Matsuzaka will have some other things to work on:
"The life on my breaking pitches and everything needs to improve," Matsuzaka said. "There's still a little bit more that I need to do. More important, I think my velocity can improve. It's not where I know it can be, and that was probably one of the reasons why the front office also decided to make this decision.
So assuming that Scott Kazmir makes the rotation, there should be lots of starting depth in Columbus to start the year. Besides Daisuke, Trevor Bauer, Carlos Carrasco, and Corey Kluber will probably be in the rotation (though perhaps Kluber could serve as an easly-season longman in the major-league bullpen). The major-league rotation is chock full of question marks, so if one of these guys gets on a roll, it shouldn't be long until they're in Cleveland.
I'd also like to say something about how the Indians handled the situation. You could tell from recent quotes that Terry Francona had a decision made in his mind but didn't want to voice it yet, as it would be unfair to those still in camp, especially Matsuzaka. Now that decision has been communicated with no hard feelings, and Matsuzaka seems completely on board with it. It may not seem important now as to how the decision was made and executed, but if the Indians can get 20 good starts out of Matsuzaka this season, that one meeting could be worth a lot.