The point guard has agreed to re-sign with the Raptors, his agent confirmed Wednesday night. Yahoo Sports reported that the deal was for four years and $48 million.
Lowry averaged career highs of 17.9 points and 7.4 assists for the Raptors, who were one of the NBA's biggest surprises in going 48-34. They were expected to be one of league's worst teams, particularly after trading forward Rudy Gay early in the season, but instead nearly reached the Eastern Conference semifinals before falling to Brooklyn in seven games.
They were led by their guard tandem of Lowry and All-Star DeMar DeRozan, who will be staying together.
Lowry posted a picture of himself on Twitter in a Raptors jersey, writing that Toronto would be his home city.
He was considered the top point guard available and reportedly targeted by contending teams such as Miami and Houston during free agency before deciding to stay put.
Contracts can't be signed until July 10.
Lowry has also played for Memphis and Houston, which traded him to Toronto in 2012. The 2006 first-round pick by the Grizzlies out of Villanova has career averages of 11.7 points and 5.4 assists.