Arenas agreed to the deal July 3 while still on his tour of Asia and Europe, but a few small details needed to be worked out before it could be finalized and signed. Wizards president Ernie Grunfeld and Arenas - who does not have an agent and represented himself in the negotiations - e-mailed back and forth for several days, ironing out the wrinkles.
Arenas returned from his trip Saturday, and the terms were finalized Sunday.
Arenas will earn roughly $14.5 million in the first year of the contract. The deal includes a player option after the fourth year, a source with knowledge of the situation said. In the sixth and final year of the contract, Arenas is set to earn $20.3 million.
“Today is a great day for the Wizards organization,” Grunfeld said. “Gilbert is a phenomenal player, and his value to the franchise goes beyond what he brings to the court. We're proud and excited that we were able to take care of our own free agents and open the 2008-09 season with a healthy core intact.”
Last month, Arenas opted out of the final year of the six-year, $65 million contract he signed with Washington in 2003 so he could land a long-term max contract. In the first hours of free agency July 1, the Wizards offered Arenas the max - a six-year deal worth up to $127 million.
But Arenas decided to take less than the max so he wouldn't cripple the Wizards financially and prevent them from making future moves to improve the team.
After re-signing both Arenas and team captain Antawn Jamison and adding backup point guard Dee Brown, the Wizards are between $1 million and $1.5 million under the NBA luxury tax threshold for the upcoming season.