WATCH:

Thunder trade James Harden to Rockets

The Thunder couldn't reach a deal with James Harden. (Getty Images)

The Thunder couldn't reach a deal with James Harden. (Getty Images)

The Oklahoma City Thunder have traded James Harden to the Houston Rockets after they were unable to agree to a contract extension with the star guard, league sources told Yahoo! Sports.

[Fantasy Basketball '12: Play the official game of NBA.com]

The Rockets sent Kevin Martin, Jeremy Lamb and future draft considerations to the Thunder for Harden, sources told Y! Sports. Along with Harden, the Thunder will send Cole Aldrich, Lazar Hayward and Daequan Cook to the Rockets.

Houston also sent two 2013 first-round picks (from Dallas and Toronto) to Oklahoma City, sources told Y! Sports, as well as a 2013 second-round pick (via Charlotte). The Thunder will receive the Toronto pick this year if it's slotted Nos. 4-14. That pick also is top-three protected in 2014, top-two protected in 2015 and top-one protected in 2016.

[Fantasy basketball: Top 100 draft picks]

Contract extension talks between the Thunder and Harden broke down, and Thunder general manger Sam Presti moved quickly to trade the guard. Harden rejected a four-year offer that would have paid him a base salary of $53 million to $54 million, league sources said. That offer would have pushed OKC's payroll to $95 million, and Thunder officials weren't willing to go any higher. The 2012-13 salary cap is set at just over $58 million, and the luxury tax kicks in at $70.3 million, while a four-year max deal is worth $60 million.

The Thunder are already paying franchise stars Kevin Durant and Russell Westbrook on maximum contracts. The trade breaks up OKC's young core, which carried the franchise into last season's NBA Finals. The Thunder agreed to a four-year contract extension worth about $50 million with forward Serge Ibaka after the season.

Houston hasn't been allowed to discuss a contract extension with Harden's agent Rob Pelinka yet, but will start immediately once the deal is officially completed. Houston can choose to give Harden a four or five-year maximum contract extension.

The Rockets are expected to make a max offer of four or five years before Wednesday's deadline for the class of 2009 extensions, sources said. Harden is expected to come to terms and never see restricted free agency in the summer of 2013.

Harden, 23, averaged 16.8 points, 4.1 rebounds and 3.7 assists last season and was named the league's Sixth Man of the Year.

Martin is happy to be headed to the Thunder.

"Oh my gosh!" he told Y! Sports' Marc Spears. "Feels like a dream. Sometimes words can't describe it."

NBA video from Yahoo! Sports

Other popular content on the Yahoo! network:
David Stern's final task: Promote myth of David Stern
Peyton Manning buys 21 pizza joints in Denver
QB Matt McGloin helps Penn State put football focus back on field
GrindTv: Photog stares down mako shark, gets unreal pic

Sign up for Yahoo Fantasy Hockey
  • Cards need Wainwright to step up vs. Reds

    A 15-2 rout at the hands of the Cincinnati Reds on Monday represented more than a loss for the St. Louis Cardinals. It took away the Cardinals' ability to win their way to the playoffs without requiring help from others, putting them into a more … More »

    AP - Sports - 7 minutes ago
  • Blue Jays host Orioles with top wild card still up for grabs

    The Toronto Blue Jays and the Baltimore Orioles meet Tuesday in the opener of a three-game series at Rogers Centre that could decide the first wild-card spot in the American League. The Blue Jays lost Monday 7-5 to the New York Yankees after being … More »

    AP - Sports - 7 minutes ago
  • Team Europe to lean on 6-9 Chara against Canada in World Cup

    Team Europe to lean on 6-9 Chara against Canada in World Cup

    Team Europe will lean on 6-foot-9 defenseman Zdeno Chara, referred to by his coach as a tower, to slow Canada in the World Cup of Hockey finals. When Sidney Crosby and Co. come charging down the ice, Chara will often be standing and skating in … More »

    AP - Sports - 7 minutes ago
  • Yormark looking forward to Islanders' 2nd year at Barclays

    Pleased with the progress made during the New York Islanders' first season in Brooklyn, Brett Yormark is looking forward to the team's second year at Barclays Center. ''I thought we ended the year in a much better place than we started,'' said … More »

    AP - Sports - 8 minutes ago
  • AP Interview: LeBron says "a personal goal" to match Jordan

    Long flattered to be mentioned in the same company with Jordan and other NBA legends, James has been hesitant to publicly acknowledge that he wants to be remembered as the greatest in league history. ''It's a personal goal,'' James told The … More »

    AP - Sports - 8 minutes ago