The reductions leave 36 players on the Royals' 40-man roster.
DiNardo, a left-hander, made five late-season starts for the Royals, going 0-3 with a 10.13 ERA. He gave up 41 hits, 15 walks and 24 earned runs in just 21 1/3 innings.
That came after DiNardo went 10-5 with a 3.32 ERA in 29 games (23 starts) for Omaha and was named that club's Pitcher of the Year. DiNardo, 30, previously pitched for Oakland and Boston.
Yabuta, 36, was 2-1 with a 13.50 ERA in 12 relief appearances for the Royals this year. He spent most of the season with Omaha, going 2-1 with a 3.55 ERA in 26 games.
The Royals declined their option on Yabuta's $4 million contract for 2010 last week. In two years with the Royals, the former Japan League star was 3-4 with a 7.14 ERA in 43 games.
Dick Kaegel is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.