The Kansas City Royals finalized a two-year contract extension with Seth Lugo on Monday, hoping to keep the veteran starter in the rotation through 2027.

The extension is worth a guaranteed $46 million, including a $3 million signing bonus and a $20 million salary in ’26 and ’27. The extension also includes a vesting option for 2028, if Lugo reaches a certain performance threshold based on the number of innings Lugo throws over the next two season. Lugo would need to throw 335 innings over the next two seasons, or 190 innings in 2027 to qualify for the option.

Lugo has been one of the best pitchers in the American League since signing with the Royals, finishing second in AL Cy Young voting in 2024. Lugo has made 52 starts with the Royals, pitching to a 2.98 ERA in 319.2 innings.

The Royals (52-54) are in the hunt for a playoff spot, hoping to get back to the postseason after making it to the American League Division Series in 2024. Kansas City is currently sitting four games back in the wild card race and 8.5 games back of Detroit for the AL Central lead.