(Photo credit: Sam Navarro-Imagn Images)

Kansas City right-hander Seth Lugo, once thought to be a prime trade candidate before Thursday's deadline, will stay with the Royals after agreeing to a two-year, $46 million contract extension, according to multiple reports on Sunday night.

Lugo will earn $20 million annually plus a $3 million signing bonus, per the reports. The deal also includes a performance-based vesting option for a third season in 2028 for $20 million or a $17 million club option with a $3 million buyout, according to the reports.

The 35-year-old currently has a $15 million player option for 2026 following the two-year, $30 million contract he signed for 2024-25, but he was expected to decline it and become a free agent. Instead, both he and the club appear to want to keep him in Kansas City.

The Royals have not made an announcement as of Sunday night.

The team enters Monday with a 52-54 record for third place in the American League Central and four games behind Seattle and Texas (each 56-50), who are tied for the third AL wild-card berth. Kansas City already added to the roster by trading for veteran Arizona outfielder Randal Grichuk on Saturday in exchange for rookie reliever Andrew Hoffmann.

Lugo is 7-5 with a 2.95 ERA, 33 walks and 99 strikeouts in 113 innings over 19 starts this season.

He was a 2024 All-Star in his first campaign after signing as a free agent with the Royals and finished second in the American League Cy Young Award voting. Lugo went 16-9 with a 3.00 ERA, 48 walks and 181 strikeouts in 206 2/3 innings over a major league-high 33 starts.

His career record is 63-45 with 16 saves, a 3.33 ERA, 254 walks and 928 strikeouts in 960 2/3 innings over 353 games (116 starts) for the New York Mets (2016-22), San Diego Padres (2023) and Royals (2024-present).

The New York Mets selected Lugo in the 34th round of the 2011 MLB Draft out of Centenary College of Louisiana.

--Field Level Media