James Harden has agreed to a new deal with the Cavaliers after Peyton Watson arrived. Sarah Stier / Getty ImagesAug. 20, 2026 1:05 pm EDT Updated James Harden has agreed to re-sign with the Cleveland Cavaliers for 3 years and $97 million, including a player option for the third season, according to league sources who spoke on condition of anonymity because the deal is not finalized.The 36-year-old, 11-time NBA All-Star guard declined his $42.3 million option for next season in late June and was waiting to sign his new deal to give the Cavaliers more salary-cap flexibility to make a move such as signing LeBron James, according to a league source who spoke on condition of anonymity to describe ongoing deliberations. While James ultimately signed with the Philadelphia 76ers, the Cavaliers used the extra flexibility to acquire former Denver Nuggets forward Peyton Watson in a sign-and-trade.Harden averaged 20.5 points and 7.7 assists in 26 games for the Cavs after arriving in a February trade for Darius Garland. They reached the Eastern Conference finals for the first time since 2018 and since 1993 without James on the roster, and the Cavs strongly believe Harden’s veteran presence, size and physical toughness were major reasons why. He averaged 19.2 points and 5.5 assists in the playoffs but shot under 30 percent from 3-point range and averaged 3.2 turnovers.