The contract includes an option for James to become a free agent next summer, but it is strictly "a business deal," according to the person who spoke to The Associated Press on Saturday on condition of anonymity because the team has not commented about the agreement.
James announced he was returning to the Cavaliers on Friday, picking Cleveland over Miami and reversing the decision he made four years ago to sign as a free agent with the Heat.
In an essay in Sports Illustrated, James indicated he will finish his career in Cleveland.
ESPN.com first reported the deal for James.
The four-time MVP is in Brazil to watch Sunday's World Cup final.
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