The city of Cleveland can officially exhale. Donovan Mitchell is there to stay.

Mitchell and the Cavaliers agreed to a three-year, $150.3 million contract extension, ESPN's Adrian Wojnarowski reported Tuesday. The All-Star guard could have become an unrestricted free agent next summer, and the Cavs likely would have explored trading Mitchell if he did not agree to an extension.

Instead, Mitchell is under team control for at least the next three seasons and can't become a free agent until 2027. Mitchell's contract will keep its $35.4 million salary for the 2024-25 season, but he will receive a raise to $46.4 million for the 2025-26 campaign.

Instead, Mitchell is under team control for at least the next three seasons and can't become a free agent until 2027. Mitchell's contract will keep its $35.4 million salary for the 2024-25 season, but he will receive a raise to $46.4 million for the 2025-26 campaign.

The extension will have little impact on the Cavs' long-term cap outlook; he's a superstar getting paid like one. In terms of a value proposition, top NBA stars almost always earn less than what they're worth due to the max contract structure.

The biggest strain on the Cavs' cap will be the upcoming extension for Evan Mobley, who is eligible for a five-year extension that could be worth up to $270 million. It's hard to imagine Mobley agreeing to a deal at less than his full max despite his plateau in play, and his new deal will send the Cavs soaring into tax territory in 2025-26.

Of course, this assumes Cleveland runs things back with its current roster, which is not a lock. Darius Garland could request a trade now that Mitchell has signed his extension, as the former All-Star's stock has fallen significantly playing alongside his ball-dominant co-star. The Cavs have been adamant in their belief the Garland-Mitchell tandem can work, but it's clear which of the two will be headed elsewhere if a deal is made.

Cleveland could also explore the trade market for Jarrett Allen, whose $20 million annual salary is a bargain. Allen's position overlap with Mobley creates an awkward on-court dynamic, and the Cavs might be smart to make a move before they need to decide on an Allen extension.