Westbrook was set to become a restricted free agent at the end of the season, meaning the Thunder would have had to match any offer he received from another team. Instead, they locked him up with a new deal 15 games into this season.
The Thunder did not disclose terms, but a source told ESPN.com's Brian Windhorst that the contract is for five years and at the maximum level -- which won't be known until next year but is likely to be about $80 million.
There also is no opt-out clause in the deal, the source said, which means Westbrook is committed to the Thunder through the 2016-17 season. This would follow in the footsteps of teammate Kevin Durant and Chicago Bulls guard Derrick Rose, who started a new trend of star players not putting opt-out clauses in their deals.
Oklahoma City has the best record in the Western Conference, with Westbrook averaging 20.5 points, 5.5 assists and 5.0 rebounds. He was chosen as an All-Star for the first time last season.
"We are thrilled to solidify Russell's future with the Thunder," general manager Sam Presti said in a statement. "Since we arrived in Oklahoma City, Russell's work ethic, persistence, character, and involvement in our community have helped us establish the standards that we are committed to on a day-to-day basis. He is a valued member of our organization and we look forward to his continued contributions on and off the floor."
Westbrook made the All-NBA second team last season after averaging 21.9 points, 8.2 assists and 1.9 steals -- ranking among the top 15 in the league in all three categories. The Thunder made it to the Western Conference finals last season, losing to the Dallas Mavericks.
Westbrook scored a season-high 36 points in Oklahoma City's 105-102 loss at Washington on Wednesday night.
The Thunder had an off day Thursday during a three-game East Coast road trip and Westbrook was not immediately available for comment. They play Saturday night at New Jersey and the team plans a news conference after returning to Oklahoma City.
Information from The Associated Press was included in this report.