Sources -- Royals keeping Seth Lugo on multiyear extension - ESPN

Right-hander Seth Lugo and the Kansas City Royals are finalizing a multiyear contract extension, sources told ESPN's Jeff Passan on Sunday.

Lugo, 35, had been regarded as one of the best potential trade candidates this deadline season and one of the top arms in the upcoming free agent class.

Lugo has posted ERAs of 3.60 or lower for the past five seasons despite having below-average fastball velocity and strikeout rates that are good but not great. The right-hander's ability to strand runners and limit hard contact comes in part due to his nine different pitches, which give him the flexibility to make in-game adjustments, a luxury shared by only a handful of MLB starters.

Lugo is 7-5 with a 2.95 ERA and has 99 strikeouts in 113 innings.

ESPN's Kiley McDaniel and Jeff Passan contributed to this report.