The deal, which will kick in after the 2006-07 campaign, is understood to be worth approximately $80million.

James, 21, will not officially sign the deal until next Wednesday, when the NBA's moratorium on new contracts ends.

"I am very excited and happy to be re-signing with the Cavaliers," James said in a statement.

"Staying in Cleveland near my hometown of Akron provides me with the unique opportunity to continue to play in front of my family, friends and fans."

James, who will be headed to Japan for the FIBA World Championship which tips off in August, is a two-time All-Star and perhaps the brightest young superstar in the NBA.

He averaged 31.4 points, 7.0 rebounds and 6.6 assists this past season.

The electric 6ft 8in swingman spearheaded Cleveland to their first post-season appearance since 1998 and nearly led the Cavs past the Detroit Pistons in the Eastern Conference semi-finals.

But James delayed the announcement of his decision to remain in Cleveland, leading to speculation the former number one draft pick would bolt for a larger media market like Chicago or New York.

However, James opted to stay with the Cavs, a vastly improved franchise under owner Dan Gilbert.

General manager Danny Ferry and the rest of the organisation clearly made an effort last off-season to build a team around James. Ferry re-signed center Zydrunas Ilgauskas and brought in free agents Larry Hughes, Donyell Marshall and Damon Jones.

"I look forward to working toward bringing a championship to our great fans and the city of Cleveland," James said.

"I'd like to thank my coaches and team-mates as well as the entire Cavalier organisation for their hard work, encouragement and support."

Article courtesy of fiba.com