Sources: George Karl agrees to deal

George Karl and the Denver Nuggets have agreed to terms on a new contract extension, according to league sources.

Exact terms of the deal are not known, but one source said the multiyear extension is worth at least three years. Karl, who is making $3 million this season, had been discussing the extension for much of the season with Nuggets president Josh Kroenke and general manager Masai Ujiri.

The 59-year-old Karl is in his seventh season in Denver, where he's never failed to lead the Nuggets to the playoffs. In his 23rd season as an NBA head coach overall, he ranks seventh on the all-time wins list with 1,022 victories.

The extension comes after a challenging year for Karl. Diagnosed last February with neck and throat cancer, he underwent intense radiation and chemotherapy treatments that caused him to miss last season's playoffs. It was the second time Karl had been diagnosed with the disease, having overcome prostate cancer in 2005.

Karl has been fine this season, coaching the entire year and having no relapses. But the mental toll of enduring the "MeloDrama" that was the Carmelo Anthony trade talks this season presented one of the most challenging situations of Karl's career.

Visibly relaxed now that Anthony has been traded to the New York Knicks, Karl has the Nuggets playing surprisingly good basketball as they've won five of their seven games without the superstar forward.

While Karl's return is now a certainty, what type of team he'll be coaching next season is still something of a mystery. Several of the club's top players are free agents, including Nene, Kenyon Martin and J.R. Smith. The Nuggets are hoping to bring Nene back and are discussing a possible contract extension with his representatives.

Despite the loss of Anthony and the impending free agency, the Nuggets' future appears bright. Kroenke and Ujiri did an excellent job of getting value for Anthony and enter the offseason with several valuable assets.

Danilo Gallinari, who joined the Nuggets as part of the Knicks trade, is widely coveted, as sources say as many as 16 teams contacted Denver about trading for him before last week's deadline. While the Nuggets plan to keep Gallinari, Wilson Chandler, Raymond Felton and Timofey Mozgov also drew significant interest before the deadline.

Chris Broussard covers the NBA for ESPN The Magazine.