Phegley's agency, Pro Star Management, announced Wednesday that the 32-year-old catcher has elected to retire from professional baseball.
Phegley cleared waivers and was assigned outright to the Cubs' alternate training site, Jordan Bastian of MLB.com reports.
Phegley will serve as the Cubs' designated hitter and will bat seventh in the first game of Monday's doubleheader with the Cardinals.
The Cubs selected Phegley's contract Thursday, Sahadev Sharma of The Athletic reports.
Phegley will be a part of the Cubs' 60-man player pool this season.
Phegley is an option for the Cubs' three-player "taxi squad" when the regular season begins next month, Tim Stebbins of NBC Sports Chicago reports.
Phegley is one of several candidates for the Cubs' final roster spot out of spring training, Gordon Wittenmyer of the Chicago Sun-Times reports.
Phegley went 2-for-3 with a three-run home run in Monday's Cactus League win over the Mariners.
Phegley signed a minor-league contract with the Cubs on Friday, Mark Gonzales of the Chicago Tribune reports.
Phegley was non-tendered by Oakland on Monday, Susan Slusser of the San Francisco Chronicle reports.