Chip Kelly agrees to contract extension

Oregon and Chip Kelly seem intent on staying together for the long term.

Kelly has agreed to a six-year contract extension that runs through the 2015 season, the school announced Tuesday.

The total value of the six-year agreement is $20.5 million, an average of just over $3.4 million per season, which would make him the Pac-10's second highest-paid coach behind USC's Lane Kiffin. He will be guaranteed $2.4 million this year, but his contract includes numerous incentives tied to conference and national championship finishes, national rankings and his teams' academic success. Following the 2011 season, his incentives would gradually diminish while a greater share of his annual compensation would be guaranteed.

Kelly made just over $1.8 million in 2009. His new contract, which went into effect June 15 and officially runs through June 14, 2016, was finalized Tuesday, culminating discussions that were initiated last spring, the school reported.

Kelly is in just his second year as Oregon's head coach. He was hired away from New Hampshire by Mike Bellotti to become the Ducks offensive coordinator in 2007. After he was promoted last year, Kelly led the Ducks to a 10-3 record, a Pac-10 title and the Rose Bowl and was named conference coach of the year.

"Chip Kelly's track record in a short amount of time speaks volumes for his character, integrity and ability to lead this program to a new set of standards," athletic director Rob Mullens said in a statement. "It became clear before my arrival at Oregon that retaining him to head the university's football program was a priority. This is an investment in the future success of Oregon athletics and an investment in retaining one of the brightest college coaches in the country."

The contract calls for a substantial buyout on Kelly's part should he leave the university to secure any other coaching position: $4 million if he left after the first year of the agreement. That buyout gradually reduces by $250,000 each subsequent year until remaining at $2 million following the sixth season or longer of the deal.

Included in Kelly's original contract was a clause that allowed him the option of walking away from Oregon without penalty, renegotiating a new agreement or increasing his base salary to $2.3 million should he guide the Ducks to a minimum of 19 wins over the course of any two consecutive seasons. Through one-quarter of his second season, Kelly's record is 14-3.

No. 4 Oregon plays host to No. 9 Stanford on Saturday.

Ted Miller covers the Pac-10 for ESPN.com.