The extension begins in 2014 and runs through the 2017 season, and has club options for '18 and '19. Additional terms were not disclosed, but Ken Rosenthal of FOXSports.com reported the deal is worth $12.5 million for four years, with the two club options worth $6 million and $6.5 million.
"Jose values security and we value Jose, and it starts with that," Luhnow said. "He's done a terrific job for us ever since getting called up from Double-A two years ago, and he's been a consistent force in our lineup. He just knows how to hit, and he's a good defender at second base. And when you get a player like that who can add value, not only when he's at the plate but on the basepaths, but also when he's out there at second base, those are the types of guys we feel we need to have and have long term. Removing some of the uncertainty for him and for us at this point makes sense."
The Astros are essentially buying out Altuve's three arbitration years (through 2017) and doing it in a relatively cost-friendly manner for the team.
"I'm really happy to be a part of the Houston Astros organization," Altuve said in a statement. "I just want to keep playing hard and help this team win games. I love my teammates and the people of Houston, and I'm going to do everything I can to improve and win baseball games."
Luhnow spent most of his first year on the job trading away players who were in the midst of multi-year contracts in exchange for prospects, as the Astros went full-bore with their plan to rebuild through the Draft and player development. Houston opened this year with a payroll of about $22 million, with Bud Norris ($3 million) as the highest-paid player.
The Altuve deal, which has been in the works for a couple of weeks with talks intensifying in the last few days, means the club is taking the next step in its rebuilding process by locking up some young players it feels will be the foundations of its future. All-Star catcher Jason Castro could fit that mold.
"This won't be the last time we tie up one of our young players," Luhnow said. "In this case, it made a lot of sense, both in terms of timing and length of deal and so forth, but it's something we're going to look at.
"We're going to have a lot of exciting young talent coming through our system and to the big leagues, and once we feel there's enough certainty on our side that the player is going to be around and be able to contribute at the level we need him to for the long haul, we're going to try to get deals done. It eliminates some of the back-and-forth that goes on year in and year out with arbitration, and gives the player some security and gives us some, certainly, to know the player is going to be there for us."
Entering Saturday's game, Altuve leads all Major League second basemen in stolen bases (21) and double plays turned (74) and is hitting .280 with 15 doubles, a triple, three home runs and 28 RBIs. He also ranks fourth among AL second basemen in hits with 99.
He has been a durable performer for the Astros since his Major League debut on July 20, 2011, appearing in 287 games at second base in that span, tying him with the Reds' Brandon Phillips for fifth place in the Majors. Altuve is the youngest everyday second baseman in the big leagues.
In 2012, Altuve became the second-youngest Astros player ever named to an All-Star team at just 22-years-old and was named the Astros Most Valuable Player in 2012 by the Houston Chapter of the Baseball Writers Association of America after hitting .290 with 34 doubles, four triples, seven homers and 33 stolen bases.
Altuve was the Astros Minor League Player of the Year in 2011, leading all of Minor League baseball with a .389 batting average before being called up to the Majors on July 19 of that season. He was signed by the Astros out of Venezuela as a 16-year-old in 2007.