"I am grateful to extend my contract with the Thunder and continue to play with the only organization that I have played for and have loved being a part of since I was drafted into the NBA," Westbrook said in a statement. "I'm really excited about moving forward with this group of guys and continuing to play in front of the best fans in the world."
The team did not disclose terms of the deal, but sources told ESPN's Ramona Shelburne and Chris Broussard that the new contract is potentially worth $85.7 million over the next three seasons. The deal includes a player option that would allow Westbrook to still become a free agent after the 2017-18 season.
The Thunder announced a news conference for Thursday at 5:30 p.m. ET for what it called a "major announcement."
"On behalf of the Thunder organization and the entire State of Oklahoma I want to congratulate Russ and offer my sincere appreciation for not only his profound presence and skill as a player, but for his high character, personal integrity and extraordinary leadership," Thunder chairman Clayton I. Bennett said in the statement. "We are thrilled he will continue with us and we look forward to exciting days ahead for the Oklahoma City Thunder."
Talks between the sides centered around the addition of two more years to Westbrook's current deal, which expires after the 2016-17 season. The new deal would call for Westbrook's salary to jump from $17.8 million next season to the maximum $26.5 million. He would then earn the max the next two seasons if he exercises the third-year option.
The player option for the third season of the deal will allow Westbrook to capitalize on the league rule allowing players who have completed 10 seasons to earn a larger max salary.
In the wake of former MVP Durant leaving, the Thunder made locking up Westbrook to a long-term deal their primary offseason objective. Oklahoma City removed its qualifying offer to restricted free agent Dion Waiters to free up cap space to offer Westbrook a max extension. Waiters agreed to a deal with the Miami Heat last month.
Westbrook had a season for the ages in 2015-16, tying Magic Johnson for the most triple-doubles in the past 50 years with a league-high 18, including six in the month of March.
A five-time All-Star and two-time All-Star Game MVP, Westbrook averaged 23.5 points, 7.8 rebounds and 10.4 assists last season and finished fourth in the MVP voting.
"Russell has been an outstanding leader of this team since he was drafted by our organization eight years ago. His competitiveness, character, and unique athletic ability have propelled him to the forefront of the game," Thunder general manager Sam Presti said. "Russell personifies many of the traits that are synonymous with Oklahoma and Oklahomans. We are excited that Russell has chosen to continue to build the legacy of the Thunder with us as we move forward together."
Information from ESPN's Chris Broussard and Ramona Shelburne was used in this report.