Reliever Pete Fairbanks and the Tampa Bay Rays agreed Friday on a three-year, $12 million contract extension with a club option for a fourth season, sources familiar with the deal told ESPN on Friday.

Fairbanks, 29, was dominant over the final 2½ months of the 2022 season, ending the year with 22 scoreless innings in which he struck out 36, allowed nine hits and walked three batters. Fairbanks missed the first 3½ months of the season with a torn lat muscle, but his return resembled the previous two years, in which he'd developed into a strikeout machine.

The deal starts this season and covers all three of Fairbanks' arbitration years -- and also prompted the cancellation of their arbitration hearing, which was scheduled for next week. The club option would guarantee Fairbanks a $7 million salary, with escalators up to $11 million, and a $1 million buyout, according to sources.

The Rays acquired Fairbanks in a 2019 trade with the Rays for second baseman Nick Solak after Fairbanks struggled in his first two big league seasons with Texas. They came after his second Tommy John surgery, in 2017, and questions about health dogged Fairbanks. At 6-foot-6 and armed with an upper-90s fastball and 90-mph slider, though, Fairbanks was a frontline reliever toolkit, and if he stayed healthy, his ceiling was immense.

He learned to harness both pitches while with Tampa Bay, and after striking out 39 in 26.2 innings during his first season with the Rays, Fairbanks consistently pitched in high-leverage spots in 2021. He did so even more in 2022, recording eight saves in 24 appearances as his average fastball velocity leapt to 99 mph and his wipeout slider was better than ever.

Because arbitration so disproportionately rewards saves, relievers with Fairbanks' resume often don't get paid in the system commensurate to their value. The guarantee offered by Tampa Bay was a hedge against that, and getting an option on Fairbanks' first free agent year was tempting enough to bring both sides to an agreement.

It was the second long-term deal done this week by the Rays, who entered arbitration season with seven potential cases on the docket. Left-hander Jeffrey Springs agreed to a four-year, $31 million contract after a breakout 2022 in which he posted a 2.46 ERA -- including a 2.66 mark in 25 starts, during which he struck out 133 and walked 28 in 125 innings.