Arenas signed the deal Saturday, upon his return from a tour of Asia and Europe to promote the NBA and Adidas, the team said. The contract virtually assures Arenas will spend his most productive basketball years with the Wizards, The Washington Post said.

Arenas will earn around $14.5 million next season and can opt out after the fourth season (2011-12).

Arenas and the team came to terms on the deal July 3 but the deal could not be signed at that time because of the NBA's one-week moratorium on signing free agents.

Arenas agreed to sign for about $16 million less than he was originally offered so the team would have more money to sign other players, the Post said when the deal was reported July 3.

"What can I do for my family with $127 million that I can't do with $111 million?" Arenas told the newspaper.

Arenas has been a member of three NBA All-Star teams. He missed 66 games with the Wizards last season due to a knee injury.

In seven seasons, he has averaged 22.8 points per game.