Jose Alvarado is declining his $4.5 million player option and intends to sign a new three-year, $14-plus million deal to return to the New York Knicks , sources told ESPN's Shams Charania.

The guard was acquired from New Orleans during the season and had a player option for $4.5 million for next season.

"I'm Home," Alvarado wrote on X , ending his post with a series of orange and blue hearts.

I'm Home 🧡💙🧡💙🧡

— Jose Alvarado (@AlvaradoJose15) June 26, 2026

Alvarado indeed came home on Feb. 5 when the Knicks acquired the Brooklyn native who attended Christ the King High School.

He was primarily a backup behind Jalen Brunson but was on the floor with the All-Star for most of the fourth quarter of the Knicks' 107-106 victory over San Antonio in Game 4 of the NBA Finals, when they made a record comeback from a 29-point deficit . Alvarado had eight points and three assists in the period.

The Associated Press contributed to this report.