Manning got his wish.
Irsay said he was "thrilled" to sign the only four-time MVP in league history to a deal that will likely keep him in Indianapolis for the rest of his career. Irsay confirmed the figures on his twitter account, writing that Manning will earn $69 million of his deal in the first three years.
"Signing Peyton was a top priority for this organization and we are thrilled that the deal is complete," Irsay said in a statement released by the team Saturday. "We feel that it is a salary cap friendly deal and it allows us more flexibility."
Manning reported to training camp on time Sunday at Anderson University in Indianapolis along with his teammates. Players aren't scheduled to practice at the Division III school, about 40 miles northeast of Indy, until Monday.
Manning declined to comment about the deal Sunday morning but was scheduled to speak at a 2 p.m. news conference that will also include Irsay and team vice chairman Bill Polian.
Manning did sign autographs for a handful of fans and waved to fans and reporters as he took in his luggage. Indy's franchise quarterback will be placed on the physically unable to perform list as he continues to rehab from neck surgery in May. Because it is the preseason, he could be removed from the list at any time and return to practice.
His deal comes nearly five months after the team used the exclusive franchise tag to prevent Manning from negotiating with any other teams. Had Manning signed the one-year offer, he would have made $23.1 million this season. Irsay wrote on Twitter that Manning's deal will reduce his salary cap number this season to $16 million.
A Colts source said Manning had told Irsay a five-year, $100 million proposal that was heavily back-loaded in the final two years was not necessary to give him a $20 million average that no NFL player has ever attained.
Manning met with Irsay and Polian on Thursday to communicate his feelings on the new contract and encouraged them to spend money saved on his potential deal to re-sign Colts free agents while building the team's talent level and depth chart.
"While I appreciate Jim Irsay offering to make me the highest-paid player," Manning told The Indianapolis Star, "I told him I'd rather he save that money and keep whoever it is ... (running back) Joe Addai, (left tackle) Charlie Johnson ... whoever that may be. I'm willing to take less than they've offered if they are going to take that money to keep players we need to keep and go get other players. All I want is for them to have the cap and the cash to keep the players they want to keep and to sign other players."
The four-time league MVP backed up his words when he directed agent Tom Condon to be more conservative in negotiations in meetings with Polian about the contract, sources said.
The Colts immediately found a use for some of the money Manning passed on, getting Addai to re-sign with the team, according to a team source.
Addai's return leaves left tackle Charlie Johnson and defensive tackle Dan Muir as the next big ticket items. They still have not signed their first three draft picks, either, tackles Anthony Castonzo and Ben Ijalana or defensive tackle Drake Nevis.
"It's a credit 2 Peyton;he put Coltfans,teammates, Ind. n winning ahead of all else," Irsay wrote on Twitter.
During his meeting with Irsay and Polian, Manning also acknowledged uncertainty about his specific return to normal football activity as he rehabilitates from the surgery to remove a portion of a bulging disk that was causing nerve malfunctions and pain.
Manning's goal is to be ready for the Colts' regular-season opener as he enters the season with the NFL's longest active playing regular-season starting streak of 208 games.
Irsay originally said doctors expected Manning's rehab to take six to eight weeks; however, sources say Manning still has "quite a ways to go" to be ready for a full practice regimen, let alone play in a preseason game.
"There is every medical indication that he is progressing steadily," team neurosurgeon Dr. Hank Feuer said in a statement. "While he looks fine, he still has some rehabilitation to go. Recovery from disc surgery is unpredictable and it is not a medical concern that he is not ready at this time."
One source said Manning has been rehabbing diligently but getting his nerves to regenerate completely, as well as strengthening his neck, shoulder and arm, is a process that doesn't always satisfy his lack of patience for healing.
Colts coach Jim Caldwell expressed confidence Friday when he was asked how he expected Manning to approach the uncertainty of his injury.
"Like a professional, like he always does, in a first-class manner, work harder than any man on the planet to get himself ready faster than anybody, (but) he's not ready right now," Caldwell said. "Nobody works any harder, nobody is more diligent, more dedicated and he certainly has great faith in our staff that works with him here and at some point in time he'll be ready to go and when that is, we'll turn him loose."
Manning was frustrated that the NFL did not make medical exceptions during the owners' lockout for players to rehab directly with team therapists and trainers who were recovering from surgeries and injuries. The league allowed communication between team medical personnel and doctors and therapists but disallowed direct contact and rehab activity with players.
During two contracts in 13 years since the Colts made Manning the No. 1 pick in the 1998 draft, Manning has given the Colts a variety of options and clauses to automatically lower his salary-cap number. He said he will do the same with his new contract, but under the new labor agreement, teams are working with an estimated $5 million less in cap space than they were in 2009, before the uncapped year in 2010.
Behind the scenes, for more than a year, Polian has been preaching Manning's next deal as a "legacy contract" that would enable them to build the team around the quarterback with more cash and salary-cap space, and give Manning an opportunity to build his legacy with another Super Bowl ring or two.
Manning said he never has had to be convinced that being flexible with his salary was the right thing to do for the team.
Condon was unavailable for comment, but sources say the renowned agent was prepared to justify a salary that exceeded the $20 million average mark because of Manning's value to the team, whose success arguably allowed the Colts to remain in Indianapolis with new Lucas Oil Stadium, a facility constructed with substantial public funding. Indianapolis also will be the host city of its first Super Bowl in February.
Instead, Manning wanted to provide the franchise the best opportunity to be the first team to ever play in a Super Bowl that it is hosting.
Chris Mortensen is a senior NFL analyst for ESPN. Information from The Associated Press contributed to this report.