The Houston Rockets will be keeping Fred VanVleet after the veteran guard agreed to a new two-year, $50 million contract, multiple outlets reported Wednesday.

According to ESPN, Houston declined VanVleet's $44.9 million team option for the upcoming season before the two sides worked out a new deal that gives the Rockets greater financial flexibility and allows them to retain one of their key starters. The second year of the reworked contract will be a player option. 

VanVleet was entering the final season of a three-year, $128.5 million contract he signed as a free agent during the summer of 2023. The 31-year-old joined the Rockets following a successful seven-year stint with the Toronto Raptors highlighted by an All-Star selection in 2021-22 and an NBA championship in 2018-19.

The nine-year veteran averaged 17.4 points and a career-high 8.1 assists per game in his first season in Houston, though those numbers slipped a bit in 2024-25 as VanVleet averaged 14.1 points and 5.6 assists in 60 regular-season games while shooting just 37.8 per cent from the field.

VanVleet did average 18.8 points during the Rockets' loss to the Golden State Warriors in the first round of the 2025 playoffs, and his 1.57 steals per game during the regular season ranked eighth among all qualifying players.

Houston Rockets guard Fred VanVleet intends to sign a two-year, $50 million contract to stay with the franchise, with a player option in 2026-27, sources tell ESPN. Rockets are declining VanVleet's $44.9 million team option and land the new deal with Klutch Sports CEO Rich Paul. pic.twitter.com/rwtEUptBQT

— Shams Charania (@ShamsCharania) June 25, 2025

The agreement comes days after the Rockets made one of the biggest moves thus far of this offseason by acquiring 15-time All-Star Kevin Durant from the Phoenix Suns for guard Jalen Green, wing Dillon Brooks and the 10th overall pick of Wednesday's draft.

Durant's addition and the signing of VanVleet to a more team-friendly deal has made Houston among the early NBA title favourites. The Rockets finished second in the Western Conference last season with a 52-30 record to end a streak of four consecutive campaigns of missing the playoffs.

Signed by the Raptors as an undrafted free agent in 2016, VanVleet has averaged 14.9 points, 5.7 assists and 1.4 steals over 550 career regular-season games and has the reputation of being a reliable shooter. The former Wichita State star owns career percentages of 37.1 on 3-point attempts and 86.2 on free-throw tries.