Dion Waiters is staying with the Heat, signing a four-year deal to remain with Miami.

After narrowing his destinations down to the New York Knicks, Los Angeles Lakers and the Heat, the free agent guard's decision to stay in Miami was announced on Friday.

"Dion Waiters proved to us last season that we have found one of the best two guards in the NBA and we are happy today to be able to sign Dion to a long-term contract," Heat president Pat Riley said in a statement.

"We love his game and competitiveness. He is an attacker and an excellent three-point shooter as well as a defender.

"He is a player that has no fear in taking the last shot regardless of the outcome.

"We believe that continuity has shown to be one of the important things that we do by keeping a team together. Having Dion back in the fold is a big factor in keeping that team chemistry together."

Waiters, coming off a career season with the Heat following subpar stints with the Cleveland Cavaliers and Oklahoma City Thunder, was hoping to cash in on his breakout performance after signing a one-year deal worth $2.9m with Miami last July.

He turned down a player option worth just over $3.2m to test the free-agent market, but the former number four overall pick is sticking with the team that gave him the opportunity to prove he can bounce back.

Waiters, 25, averaged 15.8 points last season and posted career bests with his 39.4 percent three-point shooting, 4.3 assists and 3.3 rebounds per game.