Yahoo’s Jeff Passan announced today that the Colorado Rockies and Nolan Arenado avoided arbitration by settling on a one-year, $5 million deal for 2016. Passan’s report was later confirmed by Jon Heyman.

For example: Nolan Arenado was one of the best players last year, but because he's a first-time arb guy, he settled for $5M with Colorado.

— Jeff Passan (@JeffPassan) January 15, 2016

Recent projections predicted that Arenado would receive around $6.6 million if his case had gone all the way to arbitration, so this is a great deal for the Rockies as they were able to save somewhere in the neighborhood of $1.6 million. Other details of the deal have not been released yet, so there is still room for performance-based incentives to impact the total value of the contract. The star third base was arbitration-eligible because of the Super Two rule.

Arenado was one of the biggest surprises of the 2015 season as he slashed .287/.323/.575 with a league-leading 42 HR and 130 RBI. He also won his third straight Gold Glove Award and was named the Defensive Player of the Year by Fielding Bible. As one of, if not the most valuable player on the Rockies’ roster in 2015, Arenado was due for a large pay increase.

Because Arenado still has four years left of team control left, the Rockies had most of the leverage in negotiations. The only way Arenado can play for another team before 2020 is by way of trade. Further, because this is Arenado’s first year of arbitration eligibility, the deal was lower than projected. If his 2016 season is similar to 2015, it is likely the Rockies will look to sign Arenado to a multi-year deal and essentially buy out the rest of this arbitration years.

The Rockies have yet to agree with DJ LeMahieu and Charlie Blackmon, the last two Rockies who filed for arbitration.