The Celtics confirmed the signing Monday night. The deal is for five years and will be worth at least $55 million, a source confirmed to ESPN's Ric Bucher.
"We are extremely pleased to be able to extend Rajon's contract," said Celtics president of basketball operations Danny Ainge. "We believe that he is one of the elite point guards in the NBA and has a tremendous future ahead of him."
Rondo and the team agreed to the deal late Sunday night, thanks in large part to what the 23-year-old guard has demonstrated since training camp began.
"I'm excited, thankful, humbled," Rondo said. "Nothing changes, though. There's still one goal in mind. It's a great opportunity, but I'm focused on winning a championship."
Ainge and owner Wyc Grousbeck balked at giving Rondo the kind of deal he wanted because of concern about his leadership skills and integration in the team fabric when negotiations began.
"They were candid and we understood," said Rondo's agent, Bill Duffy. "It was never about on the court. They wanted him to demonstrate being more of a leader, meshing with the team, being engaged in the locker room. Those issues have been squelched. I have to give a lot of credit to Ainge and Wyc. When there is an issue and you get it resolved, it's like a cleansing."
The Celtics and Rondo were faced with a midnight deadline Monday night to work out a deal. Had the sides not been able to come to an agreement on an extension, Rondo would have become a restricted free agent July 1. Yahoo! Sports first reported the agreement.
"There's always the possibility that there would be more money in a free-agent situation, even though it's harder for a restricted free agent," Duffy said. "But because Rajon is in such an ideal situation, it was my responsibility to promote continuity."
Duffy told Yahoo! Sports that he called Ainge on Sunday to inform him Rondo was prepared to play out his contract and become a restricted free agent next summer because they weren't satisfied with the team's offers. Ainge, according to Duffy, then gave ground to finish off the deal.
"I'm really happy," Celtics coach Doc Rivers said Monday at practice. "He's earned it. He deserves it. It's great to get it in the past. Honestly, I didn't think it would have an impact whether it got done sooner, later, or now. I'm glad it's over with so we don't have to talk about it anymore."
Rondo's camp appeared prepared to scrap the idea of further talks and consider the matter of an extension closed as recently as last Monday. Yet a meeting Tuesday before Boston's first game in Cleveland between Ainge and Duffy resuscitated talks, with Boston making unspecified improvements to its previous offer.
Rondo is earning $2.3 million this season in the last year of his rookie contract. He averaged 11.9 points, 8.2 assists and 5.2 rebounds per game last season but pushed those averages to an impressive near triple-double in the playoffs with star forward Kevin Garnett sidelined.
Information from ESPN The Magazine's Ric Bucher, ESPNBoston.com's Chris Forsberg and ESPN.com NBA senior writer Marc Stein was used in this report.