The Oklahoma City Thunder have signed Luguentz Dort to a five-year deal worth $87.5 million, his agent Thad Foucher told ESPN's Adrian Wojnarowski.

The deal comes after the Thunder declined the $1.9 million team option on Dort's contract for 2022-23, making him a restricted free agent and providing an opening to negotiate a new deal.

The undrafted player made an estimated $3.5 million over his first three years combined, but he is now set to average $17.5 million over the next five seasons.

Thunder general manager Sam Presti initially said the team's plan was to pick up the cheaper option and negotiate a new deal in 2023.

"Everybody knows how we feel about Lu and what he means to the team," Presti told reporters last week. "With that being said, he'll be a free agent after next season, and we’ll have the ability to have those conversations with him at that time."

The change in strategy leads to a significant raise next year, but it keeps the guard under team control for an extended stretch.

Dort is coming off his best season in the NBA, averaging 17.4 points and 4.2 rebounds per game. He has improved his efficiency each year and set a career high with a .493 effective field goal percentage.

The 23-year-old is still best known for his defensive work, which helped him earn a two-way contract in 2019-20 and eventually postseason playing time as a rookie. He started all six playoff games alongside Chris Paul in a competitive series against James Harden and the Houston Rockets.

When Oklahoma City began its rebuild the following offseason, Dort became a bigger part of the team's offense next to Shai Gilgeous-Alexander.

With Gilgeous-Alexander, Dort, Josh Giddey and Chet Holmgren under team control for the next few years, the Thunder have built a young core that will potentially get the team closer to playoff contention.