The 32-year-old Diaw reached agreement on a three-year, $22 million contract with the NBA champion Spurs, according to multiple reports Sunday. Contracts cannot be signed until Thursday.
In 79 regular-season games with the Spurs last season, Diaw averaged 9.1 points and 4.1 rebounds. Diaw made an impact in the NBA Finals against the Miami Heat, averaging 6.2 points, 8.6 rebounds and 5.8 assists.
"Hey spurs fans, Good news i stay in san antonio for a few more years. Lets win it again," Diaw said on Instagram.
Diaw came to the Spurs in 2012 after he was waived by Charlotte. He is a member of the French national team with Spurs teammate Tony Parker.
The Spurs also agreed to a contract extension with backup point guard Patty Mills.