Jose Alvarado is set to remain with the New York Knicks after declining his $4.5 million player option and agreeing to a new three-year deal worth more than $14 million, according to reports.

The move secures the return of the New York native, whom the Knicks prioritized after he played a key role in the franchise’s recent championship run. The agreement was first reported by ESPN and confirmed by multiple outlets.

Alvarado, who was acquired from the New Orleans Pelicans during the season, quickly became a valuable contributor with his defense, energy and playmaking off the bench.

He had the option to test free agency but instead chose to remain with his hometown team on a longer-term deal.

“I’m home,” Alvarado posted on X, punctuating the message with orange and blue heart emojis.

I’m Home 🧡💙🧡💙🧡

— Jose Alvarado (@AlvaradoJose15) June 26, 2026

The new contract provides both financial security for Alvarado and roster continuity for the Knicks, who are looking to build on their title-winning campaign.