Diamond was 5-4 with a 3.16 ERA in 21 starts for Triple-A Iowa. He has struck out 104 in 108 1/3 innings and opponents are batting .218 against him.
In the right-hander's previous start Thursday against Albuquerque, he was pulled after throwing 64 pitches in four innings. The Cubs had been talking to teams regarding Lilly, who was dealt Saturday to the Dodgers along with infielder Ryan Theriot for Blake DeWitt and two Minor League pitchers.
Diamond was the Rangers' first-round Draft pick in 2004, but his career has been slowed because of elbow problems. He underwent Tommy John surgery in March 2007.
The Cubs claimed him off waivers in September 2009. Cubs assistant general manager Randy Bush knows Diamond well. Bush was the pitcher's coach at the University of New Orleans.