After losing LeBron James, the Miami Heat have reached agreement with free-agent forward Luol Deng on a two-year, $20 million contract, league sources told Yahoo Sports.

Deng will hold a player option on the 2015-16 season, a source said.

Deng chose the Heat believing their returning nucleus and free-agent signings can keep them contending in the Eastern Conference. The absence of state income tax made the Heat's offer a sound financial decision for him, too.

Heat president Pat Riley and Deng's agent Ron Shade talked on Saturday and completed the deal on Sunday morning.

Deng, 29, delivers the Heat a tough-minded, defensive-first forward with a versatile offensive game to complement Chris Bosh on the frontline.