The two sides reached a deal on a five-year, $65 million contract. Duffy passed his physical, and the team officially announced the transaction early Monday afternoon.
Duffy has been in the Royals' organization since being drafted by them in 2007 and was on their World Series winning squad in 2015.
Interest between Duffy and Kansas City was mutual, and Duffy himself said in 2012, "Bury me a Royal." This new deal will keep him in Royals blue and white at a smooth $13 million per season.
Duffy will make $5 million in 2017, which would have been his last year eligible for arbitration. In 2018, he makes $14 million before making $15.25 million in 2019 and 2020. In 2021, Duffy earns his largest salary of $15.5 million.
The 28-year-old had his most successful season of his career in 2016.
Over 179.2 innings coming in 42 appearances (26 starts), Duffy posted a 3.51 ERA and a 188-42 strikeout-to-walk ratio, marking the first time in his career (min. 30 innings) where he averaged over one strikeout per inning. While his FIP and xFIP numbers of 3.83 and 3.79, respectively, suggest he may have been a bit lucky, Duffy was still worth 2.8 fWAR.
Duffy's potential showed through during a stretch from the beginning of June to the middle of August. Over 15 starts, he posted a 2.58 ERA and struck out 109 batters (walking 20) over 101.1 innings. For a time, Duffy even was in Cy Young award discussion.
His career has taken lots of twists and turns, including a Tommy John surgery in 2012. Still, though, Duffy has not had a full season of starting, perhaps making this deal a bit risky for Kansas City. The potential is certainly there, and it could pay major dividends if it does end up shining through.
Yahoo Sports' Jeff Passan was the first to report Duffy's extension.