The deal is worth around $40 million and includes about $19 million in guarantees, a source told ESPN.com's John Clayton. Colston was one of the key free agents the Saints couldn't afford to lose.
"This was important to me, to be back with this team in this situation," Colston said in a statement released by the Saints. "I was not looking to chase free agency; it was more important for me to be back in our program, a program we have been building and a program I believe in. The Saints have been loyal to me from the beginning and I want to thank my agent Joel Segal and Saints GM Mickey Loomis for getting this deal done before free agency. Now it is time to get back to work and win some more rings."
The Saints will also host former Ravens guard Ben Grubbs as they prepare to possibly lose Nicks, a league source told ESPN NFL Insider Adam Schefter.
Colston has had more than 1,000 yards receiving in five of his six seasons, coming up short only when he missed five games with a hand injury in 2008.
"Since we drafted Marques in 2006, he's been everything that we are looking for in a New Orleans Saint as a player and a person," Loomis said in the statement. "His combination of production, work ethic and reliability speaks for itself. He has proudly represented our team both on the field and in the community. Credit goes to Marques for wanting to get this deal done before free agency started. He's been a major part of our success and we're excited that he will continue to be an integral part of our team for years to come."
Last season, the 28-year-old Colston missed two games with a broken collarbone and finished third on the club in catches with 80, second in yards with 1,143 and tied for second in touchdown catches with eight.
Colston averaged 81.6 yards receiving in his 14 games. Had he maintained that for all 16, he would have posted 1,306 yards, four fewer than tight end Jimmy Graham, who led the Saints and ranked seventh in the NFL.
Robert Meachem, who teamed with Colston and Graham in the Saints' potent passing attack, agreed to a four-year, $25.9 million deal with the Chargers, multiple sources told ESPN.com early Wednesday.
Information from ESPN.com senior writer John Clayton and The Associated Press was used in this report.