Updated: February 25, 2013, 6:43 PM ET
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Tom Brady Signs 3-Year Extension
Adam Schefter, Brian Dawkins and Tim Hasselbeck discuss Tom Brady's extension with the Patriots.
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Tom Brady has agreed to a three-year, $27 million contract extension with the Patriots, a deal that will keep him with New England through the 2017 season, a league source confirmed to ESPNBoston.com's Mike Reiss.
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The extension includes a $3 million signing bonus along with annual salaries of $7 million in 2015, $8 million in 2016 and $9 million in 2017, when Brady will turn 40, according to the source.
Brady's relatively modest deal frees up $15 million worth of salary-cap space for the Patriots in the 2013 and 2014 seasons, a league source told ESPN.
Though other quarterbacks recently have signed deals nearly twice as lucrative, Brady previously had stated that he wants to play until he is 40 and Monday's extension should help New England maintain a competitive team around the two-time NFL MVP.
The Patriots gained $8 million in salary-cap space this year and $7 million in cap room next season. Brady's cap numbers, which were scheduled to be $21.8 million in each of the next two offseasons, now will be $14.8 million this season and $13.8 million next season.
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Brady and the Patriots started discussing the extension about a month ago, according to a league source. Brady was willing to accept this deal, the source said, because of the trust that exists between the two-time Super Bowl MVP and the team.
Brady feels that in giving New England this cap flexibility, the source said, he trusts the Patriots will add the right players to finish his career with the best chance to win another Super Bowl.
New England faces decisions this offseason regarding several high-profile players set to hit free agency, including star wide receiver Wes Welker and top cornerback Aqib Talib.
Sports Illustrated reported earlier Monday that Brady and the Patriots had agreed to the extension.
Brady passed for 4,827 yards and 34 touchdowns this past season, his 13th with the Patriots.
ESPNBoston.com's Mike Reiss and Field Yates, ESPN NFL Insider Adam Schefter and The Associated Press contributed to this report.