Financial terms were not disclosed, but the Minneapolis Star Tribune reported that Szczerbiak will receive $65 million.
"We are very excited to get Wally locked up for a number of years," said Timberwolves vice president of operations Kevin McHale. "He has improved his game every season and we expect that he will continue to work hard to make himself an even better player. It was a good deal for everyone."
First-round picks in the 1999 draft were eligible to receive extensions before the league's Oct. 31 deadline. Szczerbiak at first was seeking the maximum six-year, $80 million deal comparable to what three other members of the 1999 draft class -- Steve Francis of Houston, Baron Davis of New Orleans and Shawn Marion of Phoenix -- received this summer.
However, Szczerbiak reportedly instructed his agent Gary Wichard to come down from the maximum figure before the midnight Thursday deadline and an agreement was reached.
"Wally told me, 'Come off the max to get a deal done,'" Wichard told the newspaper. "He said, 'I like Minnesota. I like the fans here and I want to stay here and play with Kevin Garnett.'"
The 6-7 Szczerbiak, who will start at shooting guard this season but also can play small forward, was already under contract for $2.9 million in the final year of his rookie deal. He would have been eligible to become a restricted free agent after this season, with the Timberwolves permitted to match any offer.
Hobbled with a dislocated bone in his left foot, Szczerbiak missed Minnesota's season opener Wednesday night, ending his streak of 196 consecutive starts. He is questionable for Friday's game against Orlando.
The sixth overall pick in 1999, Szczerbiak was the only NBA player last season to shoot at least 50 percent from the field, 45 percent from the arc and 80 percent from the line. He also averaged 4.8 rebounds and 3.1 assists in 38 minutes.
In 237 games over three seasons, Szczerbiak has averaged 14.9 points, 4.7 rebounds and 3.0 assists.
The Timberwolves are hoping to sign star forward Garnett to a four-year extension. Garnett, who is signed through 2003-04, is scheduled to make $25.2 million this season.
Notable deaths of 2014 [PHOTOS]