Augenstein, 24, went a combined 6-9 with a 6.49 ERA in 25 games (22 starts) with Class AAA Reno and Double-A Mobile this past season, making all but three of his appearances with the Reno club of the Pacific Coast League.
"We feel he has upside and will give us flexibility as a starter or a reliever," said Cardinals general manager John Mozeliak.
Augenstein, who stands 6-foot-6, struck 110 batters in 129 innings pitched and walked 38. In 2009, he was 5-0 with a 0.99 ERA in nine starts for Mobile before making his Major League debut on May 13 at the age of 22. He appeared in seven games for the Diamondbacks, making one start.
The former University of Florida standout was a seventh-round selection by Arizona in the 2007 Draft and was a Midwest League All-Star in 2008.
Brian McTaggart is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.