The deal starts with the 2018-19 season and delivers Westbrook the biggest guaranteed contract in NBA history -- six seasons and $233 million through 2022-23. It includes a player option on the 2022-23 season, league sources said.
Westbrook's agent, Thad Foucher of Wasserman Media Group, and Thunder general manager Sam Presti finalized the deal Friday afternoon, league sources said. The plan was to announce it Sunday before a public team scrimmage at a local high school, but Westbrook showed up at the practice facility Friday and said it was the day to make it official.
By signing for the designated player veteran extension, it allows for Westbrook to sign for 35 percent of the salary cap and five additional seasons. Westbrook will earn $233 million, which includes $205 million for the new extension and $28 million for his 2017-18 salary. His 2018-19 salary, the first year of the extension, will be $35.3 million.
The Thunder confirmed they had signed Westbrook to a multiyear extension in a news release Friday afternoon.
"We are extremely fortunate to have an athlete, competitor and person such as Russell wear the Thunder uniform," Presti said. "To have him cement his legacy as a leader as we enter into our 10th season in Oklahoma City is extraordinary. I am extremely grateful to Russell, his family and to our ownership for the commitment and support that they have demonstrated in supporting our vision for the Thunder."
In the statement, Westbrook, 28, said there was no place he'd rather be than Oklahoma City and that he was "so honored" to continue his career with the Thunder.
"When you play in Oklahoma City you play in front of the best fans in the world, I'm looking forward to bringing everything I've got, for them, this city and for this organization. WHY NOT?" he said -- a sentiment he echoed in an Instagram post Friday afternoon.
After a historic MVP season, during which Westbrook averaged a triple-double of 31.6 points, 10.7 rebounds and 10.4 assists, his choice promises the Thunder relevance and contention into the foreseeable future -- and even stands as a victory for the NBA's beleaguered small-market teams.
The timing of Westbrook's extension could become a crucial cog in the recruitment of his new Thunder teammate Paul George, who will become an unrestricted free agent in July. For Westbrook and Presti, the chance to convince George to spurn big-market overtures, including from his hometown Los Angeles Lakers, could go a long way in selling George that his best chance to beat Golden State belongs with the core of Westbrook and Carmelo Anthony in Oklahoma City.
Westbrook, a two-time All-Star Game MVP, has become an iconic NBA figure in Oklahoma City, one of the league's most thrilling and unique talents and owner of an off-court persona built around the fashion industry. Westbrook signed a 10-year contract with Jordan Brand in September to become the face of the shoe giant.
In the aftermath of Kevin Durant's free-agent departure to the Warriors in July 2016, Westbrook agreed to a contract renegotiation that extended his contract through the 2018-19 season, including a player option on the final year. Amid the Thunder's despair in losing Durant, Westbrook's shorter-term commitment gave Presti and assistant GM Troy Weaver the ability to pursue the trades with Indiana and New York to acquire George and Anthony, respectively.
Westbrook was the No. 4 overall pick in the 2008 NBA draft out of UCLA, and rapidly developed into one of the NBA's biggest stars.
ESPN front-office insider Bobby Marks and ESPN.com's Royce Young contributed to this report.