In an announcement by the team, the Cincinnati Reds have officially signed right-handed pitcher Johnny Cueto to a four-year contract.

According to the Associated press, Cueto will earn $3.4 million in 2011, $5.4 million in 2012, $7.4 million in 2013, $10 million in 2014, and a $10 million option for 2015, with an $800,000 buyout (via John Fay of the Cincinnati Enquirer).

Enrique Rojas of ESPNDeportes.com first reported that the sides agreed to a four-year, $27 million deal on January 20, 2011.

The parties originally submitted numbers by the deadline this week, but the extension allows them to avoid the arbitration process.   Cueto asked for $3.9 million and the team offered $3 million.  His new contract will pay him an annual average of $6.75 million over four-years.

Cueto, 24, was 12-7 in 31 starts last season for the Reds.  The contract buys out all of his arbitration years and his first year of free agency.  The right-hander will be eligible to test the free agent market in 2015.