The Reds agreed to terms on Friday with second baseman Brandon Phillips on a four-year contract with a club option for 2012 worth at least $27 million.

The agreement means the two sides avoid arbitration.

The Reds did not announce terms, but according to Major League sources, Phillips is guaranteed $27 million plus an additional $12 million if the club option is picked up for the fifth year. That option becomes a mutual option if Phillips is traded, and salary escalators in the option year could increase the total value of the package to $43.25 million.

"This is the one team I wanted to play for," Phillips said. "I didn't want to go to arbitration. When [Reds general manager] Wayne [Krivsky] started talking to my agent about a long-term deal, I was very happy about that. The Reds gave me a second chance. They opened up the door for me -- the city welcomed me with open arms. I'm going to give back to the community. I'm going to do many things within the city. I'm going to be really into the community -- I want people to know who I am."

Phillips, 26, had been seeking a one-year deal worth $4.2 million, while the Reds were offering $2.7 million for the 2008 season. Phillips, acquired by the Reds from the Indians on April 7, 2006, for pitcher Jeff Stevens, was paid $408,000 last season.

Phillips accepted the new deal even though he may have commanded more by signing a shorter-term deal, having a good season and testing the free-agent market down the road.

"My agent told me you're losing some money by [accepting the deal], but I wasn't really worried about that," Phillips said. "I just wanted the Reds to sign me to a long-term deal. I've said that since Day 1. I just wanted it to be a fair deal, fair to me and fair to my family. [I don't care] about me losing money and stuff -- the Reds [are] my home now."

Phillips said the new contract won't add any pressure to live up to the obligation.

"I'm just going to continue to be myself," he said. "I'm still hungry. I'm not that type of person -- my momma didn't raise me like that. I'm still going to go out and play the game the way I know how and try to do better than I did last year. I love the pressure."

Phillips batted .288 with 30 home runs and 94 RBIs in 2007, and he stole 32 bases and scored 107 runs, finishing ninth in the National League in both categories, while posting a .990 fielding percentage and a career-best .816 OPS. He became only the second second baseman in Major League history to produce at least 30 homers and 30 steals in the same season.

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It was a performance that surprised even Phillips.

"I didn't think I was capable of hitting 30 home runs or putting up the numbers I did," Phillips said. "My goal was to be 20-20. I didn't know I could exceed my goal by that much. I went from 10 to 30 [homers]. It just surprised me. I knew I was capable of doing that, but I didn't think it was going to happen last year.

"That just showed me things that I didn't think I can do. [Ken] Griffey [Jr.] told me, 'Don't limit yourself to anything, because you don't know how good you are.' I'm just going out there to have fun and go out and do the things I can do."

While establishing single-season franchise records for a second baseman in total bases (315) and home runs (30), in 2007 Phillips also led all NL second sackers in fielding percentage (eight errors, .990), total chances (782), putouts (341) and assists (433).

Among all Major League second basemen, Phillips ranked in the top three in almost every major offensive category. He led the Reds in games (158), runs, hits (187), total bases, triples (six), stolen bases and multi-hit games (56).