The fourth season of the contract has a player option, sources said.
Powell – a versatile, 6-foot-11 forward/center – became a successful part of the Mavericks' development structure a season ago. He was acquired by the Mavericks as part of the Rajon Rondo trade in 2014 and swiftly appeared to be the franchise's best asset acquired in the deal, showing his size, skill set and activity.
The Mavericks prioritized the re-signing of Powell in free agency and finalized the agreement on Sunday night. Powell received interest from several teams, including the Brooklyn Nets, sources said. For the Mavericks, Powell will be an important part of their frontcourt moving forward.
In 69 games last season, Powell averaged 5.8 points and four rebounds in 14.4 minutes a night.
Powell was the No. 45 pick in the 2014 NBA draft after playing four seasons at Stanford. He signed a multiyear deal with the Cleveland Cavaliers that summer, but was traded to the Boston Celtics before being moved to Dallas.