Lawson tweeted Tuesday that the deal is done after month-long negotiations, announcing to his followers that he'll be a Nugget "for another four years" and thanking Denver management for the extension.
The deal, which will take effect starting next season, is worth $48 million over four years, a league source told ESPN The Magazine's Chris Broussard.
Lawson averaged 16.4 points and 6.6 assists last season, his first as a starter. He was drafted out of North Carolina in 2009 after winning a national title with the Tar Heels.
"We felt Ty was ready to take on a lot of responsibility last
season and he proved he could handle it," team vice president
Masai Ujiri said in a statement Tuesday night. "He is maturing as
a leader on the court and in the locker room, so it was an easy
decision for us to sign him to an extension."
The Nuggets open the season Wednesday night against the 76ers.
First-round picks from the 2009 NBA draft were facing a midnight Wednesday deadline to secure a contract extension. In most cases, those who don't will become restricted free agents in July.
ESPN The Magazine's Chris Broussard and The Associated Press contributed to this report.