The Sacramento Kings reached an agreement with forward Rudy Gay on a three-year contract extension worth $40 million, league sources confirmed Sunday.
The deal will keep Gay with the Kings through the 2017-18 season.
Gay is in the final year of his contract, which is paying him $19.3 million this season.
The deal has a player option for 2017-18, which would allow Gay to become a free agent when the NBA’s new television deal kicks in and salaries could rise significantly.
The Kings had looked to keep Gay since he agreed to exercise his player option for this season in June.
Talks between the Kings and Gay cooled over the summer while Gay focused on playing for Team USA in the FIBA World Cup. But Gay had always been open to staying in Sacramento if he saw signs the team was improving.
The Kings are 6-4. Gay is averaging a team-leading 22.5 points. He is second on the Kings with 6.8 rebounds and 3.5 assists per game.
Gay was acquired last December in a seven-player deal with Toronto. He came to the Kings off the most inefficient stretch of his career with the Raptors, who had acquired him from Memphis last January.
Gay averaged 20.1 points on 48.2 percent shooting in 55 games with the Kings after the trade. He shot 38.8 percent with the Raptors last season.
The Kings now have their top three players signed to multi-year deals.
DeMarcus Cousins is in the first year of a four-year, $62 million contract. Darren Collison is in the first year of a three-year pact worth $16 million.