The deal takes effect immediately, replacing a contract that was due to expire at the end of this season.
Kolzig, currently in his sixth full season with the Caps, last spring set team postseason marks for wins (16); save percentage (.941); shutout streak (168 minutes, 42 seconds); minutes played (1,351); and saves (740). His four shutouts tied an NHL record.
A first-round draft choice by Washington in the 1989 draft, Kolzig captured the No. 1 goalie spot last year for the first time in his career. He appeared in 64 games, finishing third in the league in wins (33) and fourth in save percentage (.920) and made his first appearance in the All-Star game.
Kolzig has struggled this season, with a 3-6-1 record and a 2.83 goals against average. He's been pulled from two games, including the Caps' 8-5 victory at Ottawa Saturday.
"Olie Kolzig certainly has proven that he is an elite goaltender in this league," general manager George McPhee said. "He obviously was a huge part of our playoff success last season and we look forward to Olie's continued success. Olie is the type of person you want in your organization for many years."
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