PITTSBURGH -- In a busy day of transactions, the Pirates agreed to terms with Ronny Cedeno and Jeff Karstens, tendered contracts to Ross Ohlendorf and Joel Hanrahan, and let Lastings Milledge walk away on Thursday. Pittsburgh had until 11:59 p.m. ET to determine whether or not to offer a contract to those five arbitration-eligible players.

The Pirates opened up additional space on the 40-man roster by not offering contracts to left-hander Donnie Veal, infielder Argenis Diaz and left-hander Brian Burres. Those three, along with Milledge, are now free agents.

By coming to agreements with Cedeno and Karstens, the Pirates have avoided a potential arbitration hearing with both. Karstens' contract covers only the 2011 season. Cedeno, too, has a one-year deal, but with a built-in club option for 2012.

The roles for Cedeno and Karstens next season are both still somewhat fluid. Cedeno is currently entrenched as the team's starting shortstop, though that has not kept the Pirates from exploring other middle-infield options. Even with this agreement, the Pirates might continue seeking an upgrade. If one is found, Cedeno could assume a backup role.

"He has the ability to play the position," Huntington said. "He shows flashes of the defense. He shows flashes of the offense. At some point in time, the consistency is either going to come or it's not going to come. There are stretches of time where we feel like it's just about there, and then we have some games that are less than ideal."

Cedeno earned $1.125 million in 2010 while batting .256 in 139 games.

Karstens can fit the role of starter, reliever or long reliever. He made 19 starts and another seven appearances out of the bullpen for the Pirates in 2010. He finished 3-10 with a 5.07 ERA.

Acquired along with Hanrahan for Nyjer Morgan and Sean Burnett in June 2009, Milledge, 25, slowly lost his grip on the starting job in right field last season. He fared well against left-handed pitchers, but that wasn't enough to put him in solid standing for another season. At best, he was seen as a platoon option or fourth outfielder. The Pirates haven't ruled out re-signing Milledge, though he'll now be able to field offers from each of the other 29 teams.

"We spent a lot of time analyzing Lastings Milledge as compared with the potential alternatives for the expected role and determined it was worth further exploration of the alternatives," Huntington said. "We remain open to continuing dialogue with Lastings."

If Milledge had been tendered a contract, he would have been due a generous increase from the $452,000 he earned last season.

As for Hanrahan and Ohlendorf, the Pirates' decision to tender each a contract is in essence an agreement to go to an arbitration hearing if no contract can be amicably agreed upon. If no deal is reached by Jan. 18, the player and team will exchange salary figures. The two sides can keep negotiating up to an arbitration hearing, which would be scheduled in February.

There was never any question about the Pirates offering a contract to either of these pitchers, both first-time arbitration players who the organization views as cornerstones.

Hanrahan will see a solid increase in salary after making $453,000 last season. He finished with a 3.62 ERA and 100 strikeouts in 69 2/3 relief innings. Hanrahan served as the club's eighth-inning set-up man before assuming partial closer duties after Octavio Dotel was traded on July 31. Hanrahan is in competition to be the team's closer in 2011.

Ohlendorf, who made $439,000 in 2010, will also see a jump, though it may not be as drastic given time missed due to injury and his unimpressive record. Still, there is an expectation that Ohlendorf will bounce back, which is why he is one of three starters firmly projected to be in next season's rotation.

"As a GM, when you say that a guy who went 1-11 projects to be in your rotation, it's an easy lightning rod for criticism," Huntington said at the end of the season. "But the reality is that Ross pitched well for us. We just didn't score runs. He deserved to win a lot more games."

Pittsburgh's decision to non-tender Milledge, Veal, Burres and Diaz opens up four spots on the Pirates' 40-man roster. With the Winter Meetings and Rule 5 Draft approaching, Huntington now has the flexibility to add to that roster without having to make immediate subtractions.

Huntington confirmed that the club has interest -- though of varying degrees -- in re-signing all four of those players.

Diaz might be the most expendable given the middle infield players the Pirates have set to start in Double-A and Triple-A next year. Burres stepped in when the Pirates needed help in the rotation last year, though he isn't seen as a long-term answer there. If he re-signs, it would be to serve as a depth option.

Veal, who underwent Tommy John surgery in early June, could be the one the Pirates are most aggressive in trying to bring back. The former Rule 5 pick has been set back by missing most of last season. But he's a hard-throwing left-hander that the Pirates valued enough to keep on the roster all of 2009.

"Everything is on schedule with Donnie's rehabilitation," Huntington said. "We made a tough business decision, but we are optimistic we will be able to re-sign Donnie."