Right-hander Yu Darvish and the San Diego Padres are in agreement on a six-year, $108 million contract extension, sources told ESPN's Jeff Passan on Thursday.

The deal, which contains a full no-trade provision, starts this season and runs through 2028, when Darvish, 36, will be 42 years old.

The average annual value of the deal is $18 million, which is $3 million less than he previously earned annually. The structure helps the Padres, who have the third-highest payroll in baseball, against the luxury tax.

Darvish was set to be a free agent after this season.

This will be the third six-year deal of his career -- first with the Texas Rangers, then with the Chicago Cubs and now with the Padres.

Darvish led the Padres in wins (16) and strikeouts (197) last season, his second with the Padres after being acquired in a 2020 trade with the Cubs. Overall, he finished 16-8 with a 3.10 ERA. He also was 2-1 in four postseason starts during the Padres' run to the NL Championship Series.

The five-time All-Star is 95-75 with a 3.50 ERA in 10 major league seasons. He has finished as the Cy Young runner-up two times (2013 and 2020).