WASHINGTON — Gilbert Arenas signed his six-year, $111 million contract with the Washington Wizards today, securing the return of a franchise player who is accepting less money than he was offered.

Arenas and the Wizards agreed to the deal July 3, but both sides waited until Arenas returned from an overseas trip to settle the details.

"Today is a great day for the Wizards organization," team president Ernie Grunfeld said. "Gilbert is a phenomenal player and his value to the franchise goes beyond what he brings to the court. We're proud and excited that we were able to take care of our own free agents and open the 2008-09 season with a healthy core intact."

The Wizards offered Arenas a max contract — $127 million over six years — leaving it up to the unpredictable Agent Zero to decide whether he would live up to his previous statement that he would take a lesser amount if it would help the team sign other players and improve the prospects of contending for an NBA title. Arenas negotiated the deal without an agent while traveling in China on a promotional tour for a shoe company.

The Wizards also bolstered their chances of keeping Arenas by signing free agent teammate Antawn Jamison to a four-year, $50 million contract. Arenas had said he would not return to the team if his good friend Jamison had been allowed to leave.

Because Arenas did not accept the max contract, the Wizards have room to make another significant addition this offseason without going over the NBA's luxury tax limit.

"I think with the players we have on this roster, we can compete with anyone in the NBA," Arenas said in a statement released by the team. "And I look forward to returning to the court next season on a mission to deliver a championship banner."

A three-time All-Star point guard, Arenas has proven to be one of the most exciting players in the NBA when healthy, averaging 22.8 points, 5.5 assists and 4.2 rebounds in his seven-season NBA career.

But a major knee injury and an overzealous rehabilitation sidelined him for most of last season. After his first surgery on the knee in April 2007, he tried to come back too soon and had a second operation in November. He missed 66 games before returning late in the season, then he had to shut himself down again during the first-round playoff series against Cleveland.

During an appearance in Europe after his trip to China, Arenas said his knee was "about 95 percent" and that he didn't want "to touch a basketball until August" because he wanted to make sure he was healthy before returning to the court.