Terms of the deal were not disclosed by the team, but the deal is reported to be worth $29.5 million ($5.9 million per year) according to ESPN's Pierre LeBrun.
"Undoubtedly, Semyon has been an impact player for us this season," Avalanche executive vice president of hockey operations Joe Sakic said in a statement released by the team. "At only 25 years old, he is entering the prime years of his career and he wants to be part of this franchise moving forward. We are very excited to have come to terms with him and the fact that he has agreed to a five-year extension demonstrates his commitment to the Avalanche and what we’re trying to accomplish."
Varlamov, originally acquired by the Avalanche from the Washington Capitals for a first-round draft pick prior to the 2011-12 season, has a .925 save percentage this season in 42 appearance for a surprising Colorado team that already has 71 points on the season and is currently sitting in a playoff position. The play of Varlamov has been a big part of that success.
Since joining the Avalanche Varlamov has a .914 save percentage over the three seasons. Among goaltenders across the league that have appeared in at least 82 games over that stretch, that puts him 19th out of 31 goalies. His cap hit would place him in the top-10 among all goaltenders in the league and fall in the same neighborhood as Dallas' Kari Lehtonen and Los Angeles' Jonathan Quick.
Earlier this season Varlamov was arrested assault charges. Those charges were later dropped.