Sources: Hill to stay with Suns

Grant Hill(notes) has decided to re-sign with Phoenix, and a large part of the decision is based on the belief that Steve Nash(notes) is close to reaching an agreement on a contract extension, league sources told Yahoo! Sports.

Hill received a two-year, $6.2 million contract with the second season at his option. Phoenix owner Robert Sarver, general manager Steve Kerr and coach Alvin Gentry met with Hill on Wednesday night and Thursday morning in Florida.

The Suns will also sign free agent Channing Frye(notes) to a two-year deal for about $4 million, sources said. The second season is at Frye's option.

The New York Knicks reportedly offered Hill the choice of a one-year, $5 million deal or a three-year, $10 million contract. Hill also had an offer from the Boston Celtics. Nevertheless, he’s believed to be comfortable with the direction of the Suns to re-sign there.

The terms of the Nash extension are unclear.

The future of All-Star power forward Amare Stoudemire is still uncertain. The Suns have so far been unwilling to give him a maximum contract extension and have explored trading him.

As did Jason Kidd, Hill used the Knicks for leverage. Once Hill was armed with New York's offer, he was able to get Sarver and Kerr to increase Phoenix’s bid.

Hill, 36, also had been courted by the Celtics. He had a history with coach Doc Rivers in Orlando, but ultimately Hill has missed too much basketball in his career to accept fewer minutes. The Celtics had hoped to pair Hill with Rasheed Wallace for another championship push, but may now give Bill Walker and J.R. Giddens a chance at the job.