Washington guard Gilbert Arenas agreed to a six-year, $US 111 million ($AU 115,445,012) contract with the Wizards on Thursday (US time), according to the Washington Times.
The deal, which will keep the eccentric combo guard in the nation's capital until 2014, cannot become official until a league moratorium concludes July 9.
Arenas opted out of the final year of his contract earlier this off-season and was offered a six-year, $US 127 million ($AU 132,016,625) deal Tuesday - the first day of free agency.
According to the Times, Arenas took less money because he did not want to be a burden on the team's salary cap.
"(The Wizards) offered me the max, and I'm basically giving back $US 16 million ($AU 16,633,400)," Arenas told the newspaper.
"This is in line with what I've been saying the whole time."
"You see players take max deals and they financially bind their teams."
"I don't want to be one of those players and three years down the road your team is strapped and can't do anything about it."
The 26-year-old Arenas was limited to just 13 games this past season after undergoing knee surgery.
He opted out of a deal that was set to pay him $US 12.8 million ($AU 13,305,835) next season.
When healthy, the six-foot-four-inch guard is one of the game's best players, posting career averages of 22.8 points and 5.5 assists in 431 games.
The Wizards re-signed All-Star forward Antawn Jamison to a four-year, $US 50 million ($AU 51,975,225) deal on Monday.
That was key for Arenas, who said he would take less money if Jamison were re-signed.
As a result, the Wizards went over the salary cap with that signing and Arenas did his best to help out.
"It's a relief," Arenas told the Times.
"It was a burden at the same time. Your whole city is depending on you, wondering if you're going to make the right decision."
"I'm a franchise player and sometimes franchise players need to make franchise decisions."