The deal includes incentive clauses that could push the contract's value to $150 million and contains a player option for the fifth year, Glushon said.
Holiday met with Pelicans officials on Friday night in New Orleans and soon after decided to close on the deal.
For the Pelicans, Holiday was an indispensable player on the roster, one with whom the franchise needed to extend itself financially to retain. New Orleans was determined to keep Holiday partnered with its front line of All-Stars Anthony Davis and DeMarcus Cousins or risk struggling to find a comparable high-level replacement on the free-agent market.
Coach Alvin Gentry has developed tremendous trust in Holiday to run the Pelicans. Holiday is known for his on-ball defense as well as slashing ability in the pick-and-roll.
Holiday, 27, became further bonded with the franchise and community via an outpouring of support that accompanied his family's health crisis last season. Holiday missed most of training camp and 12 games to start the season to care for his ailing wife, Lauren, and their newborn child.
Lauren Holiday, a longtime member of the United States women's national soccer team, gave birth to the couple's daughter in late September and underwent surgery one month later to remove a benign tumor from the right side of her brain.
Jrue Holiday averaged 15.4 points and 7.3 assists per game for the Pelicans last season. He joined New Orleans in a trade four years ago, after playing his first four seasons with the Philadelphia 76ers.
He was ranked No. 11 on the list of top available free agents this offseason by ESPN's Kevin Pelton.
Information from ESPN's Royce Young was used in this report.