On Wednesday, he confirmed on Twitter that he is returning for the 2017-18 season.
Ginobili will turn 40 next week. He plans to push back retirement for at least one more season, league sources said.
Ginobili is one of the most decorated international players in basketball history, a three-time NBA All-Star, an Olympic gold medalist and a Euroleague MVP. Ginobili made $14 million in 2016-17, during which he averaged 7.5 points and 18.7 minutes.
The Spurs are also working to finalize a new deal with free-agent center Pau Gasol, league sources said.
Gasol declined his option for the 2017-18 season.
A four-time NBA champion, Ginobili has played in 992 regular-season games and made 212 postseason appearances, while being named an All-Star on two occasions, in addition to garnering All-NBA recognition twice.
Considered one of the creators of San Antonio's culture of selflessness, Ginobili, for 15 seasons, has wowed crowds with an array of unconventional moves, clever passes and arguably the league's most dangerous Eurostep.
Ginobili ranks in the top five in Spurs franchise history in games (992), points (13,467), assists (3,838) and steals (1,349).
In Game 3 of the conference finals this year, Ginobili poured in 21 points to become the first player 39 or older to score 20 or more points off the bench in a playoff game since the NBA began tracking starts in 1970-71, according to research from Elias Sports Bureau. Ginobili contributed 17 points in Game 1. Ginobili's two highest-scoring playoff games over the past three postseasons came in the series against the Warriors.
Despite Ginobili's age, the guard still offers valuable playing time for the Spurs. Ginobili did miss his first 15 shots of the playoffs, leading many to wonder whether it was time for him to call it quits.
"You know, for moments, I felt like I didn't [have anything left] in the Memphis series," Ginobili said.
Then, in the second round, Ginobili suddenly appeared to turn back to clock. In Game 5 of the conference semifinals, Ginobili blocked James Harden's final attempt from behind to preserve a Spurs overtime victory. It marked the first time Ginobili had ever blocked Harden's shot, something of a feat in itself considering the Rockets guard had attempted 862 3-pointers during the season, including the playoffs, with just 13 of those shots being blocked, according to research from ESPN Stats & Information.
At the time, Ginobili had played his most minutes (31:46) of the postseason and contributed 12 points, seven rebounds and five assists in the win. In the second quarter, Ginobili, a lefty, flashed his trademark flair for the dramatic with a driving, wrong-footed right-handed dunk. The veteran also sent that game into overtime with a driving left-handed layup.
Then, in the conference finals, Ginobili pulled together two of his best postseason outings over the past three years.
ESPN's Michael C. Wright contributed to this report.