Steve Kerr’s 12-season tenure with the Golden State Warriors will extend to a 13th and beyond. After contemplating a split for the past three weeks, Kerr and the franchise have agreed to a new two-year contract, keeping him in San Francisco through the 2027-2028 season.

The deal will keep Kerr as the highest-paid coach in the NBA, league sources said. He made a league-high $17.5 million last season.

The agreement comes after Kerr, whose contract expired this offseason, acknowledged in mid-April that his time with the franchise could be coming to an end.

“I don’t know what’s going to happen,” Kerr said after the Warriors’ 111-96 play-in loss to the Phoenix Suns. “I still love coaching, but I get it. These jobs all have an expiration date. There is a run that happens, and when the run ends, sometimes it’s time for new blood and new ideas.”

Kerr has won four NBA titles (2015, 2017, 2018, 2022) in 12 seasons as Golden State’s coach and has built one of the most memorable dynasties in league history. Now he and the Warriors need to reset after a disappointing season, finishing 37-45 and limping as the No. 10 seed into the play-in tournament, where they lost.

The first step starts with Sunday’s draft lottery (3 p.m. ET, ABC/ESPN App). The Warriors have the 11th slot and a 9.4% chance of jumping up into the top four picks. Even if they stay at the No. 11 slot (77.6% odds), the pick is an important tool in the front office’s plan to rearrange the roster.

What went into Kerr’s decision to come back? What does his return mean for Stephen Curry and Draymond Green? Here’s what’s next for Kerr and the Warriors:

What went into Kerr’s decision to return to the Warriors?

He still wants to coach. That was the first box to check in this multilayered process. Kerr stepped away from the grind for about a week, had an important meeting with Joe Lacob and Mike Dunleavy, went on a golf trip and came back invigorated about the idea of remaining in the mix.

Kerr is 60. There are lucrative media opportunities available to him that wouldn’t require near the time or mental exertion, but the ground-zero NBA competitiveness is in Kerr’s blood. It’s why he never loved front office work, fell in love with coaching and isn’t ready to leave it. So he isn’t.

But that wasn’t the only roadblock to a return. Kerr, Lacob and Dunleavy discussed possible style and staffing tweaks and, most importantly, the state of the roster. The Warriors are aging and entering next season short-handed, as starting wings Jimmy Butler and Moses Moody rehab serious knee injuries that are expected to keep them out into the new year.

If Warriors management was ready to hit the eject button and fast forward into a deeper rebuild, there was a consensus that Kerr might not be the best fit for that type of job.

But there are avenues to improve the roster in the immediate and, while there seems to be an internal understanding that a leap back into title contention is far-fetched, Kerr’s return is a signal of a plan to reform the roster this summer in an effort to make it more competitive around Curry.

What does this mean for Stephen Curry?

He keeps the preferred coach and stable environment for what could be the final chapter of his legendary career. Curry made it clear he desired, but wouldn’t demand, a Kerr return, saying after the team’s elimination that he wanted Kerr to want to be the coach and still believe he was the right man for the job.

Team sources expressed an expectation that Curry would’ve been involved in a search for a new coach and his input valued, but that’s no longer a conversation the sides need to have.

This should also make extension conversations with Curry simpler later in the summer. The franchise icon has long expressed a desire to remain with the Warriors the entirety of his career. He can add either one or two seasons to his current deal, which has one season remaining, when he becomes extension-eligible in August. Having Kerr locked in should ease Curry’s concern of a franchise in complete transition, even if the championship ceiling is no longer there.

“We have to get back to the basics of what makes a good basketball team, a competitive basketball team every single night, realize how hard it is to win in this league,” Curry said in April. “Can we rethink how we do things with the foundation that we’ve established? We don’t have to keep saying ‘championship, championship, championship’ every day, even though we’ve experienced that. Can we build the foundation again?”

What does this mean for Draymond Green?

It would be premature to call Green’s place on the Warriors safe next season. He has a $27.6 million player option which, if he opts in, could become a necessary piece to salary match in any mid- to large-scale trades the Warriors try to execute.

But Kerr’s return is at least a pledge from the organization to value the present even while planning for the future.

In that vein, team sources have indicated that they have no intention to shop Green or push him out. On the court, they still view him as an additive winner with an elite defensive skill set that plays up when the stakes rise. Off the court, the organization felt he had a positive season as a leader while his acumen and voice essentially make him another assistant coach.

The two sides will assuredly discuss the pros and cons of an opt-in or an opt-out and extend at a lower number. Team sources indicate that the long-term extension route would only make sense on the organization side if it generates the type of immediate cap room that helps them add a usable piece. But those are conversations for June and July.

For now, the Kerr return is a beneficial development for Green.

What’s next?

The lottery. Sunday is vital for a handful of franchises around the NBA, setting the stage for the offseason. If the Warriors leap up into the top four, they’ll have a massive choice on their hands — scout and draft the best high-ceiling prospect — or dangle what will be a blue-chip asset on the trade market.

If the Warriors are to seriously compete in the trade market for Giannis Antetokounmpo, Kawhi Leonard (if he’s actually available) or any other star, this pick would assuredly be required. In the fading days of the Curry era, that’s worth a discussion.

But there is a flip side. The Warriors’ roster is in desperate need of a youth infusion as the team transitions beyond the Curry years. They won 37 games this past season, and four of their most important players are 36 or older.

Butler and Moody will miss a significant chunk of next season, leaving them bare on the wing. Barring a blockbuster move, it’s a roster closer to the bottom of the conference than the top, so giving up a lottery crack at a young talent for a marginal move could prove unwise.