McMillan will enter his third season as Indiana’s head coach after serving as the associate head coach for three seasons under Frank Vogel. Terms of his deal were not announced Tuesday.
The 54-year-old McMillan has a 90-74 record and helped lead the team to the playoffs the past two seasons. He finished sixth in Coach of the Year balloting after the Pacers surprised nearly everyone earning the No. 5 seed in the Eastern Conference with a 48-34 record and then taking LeBron James and the Cavaliers to seven games in the first round of the playoffs.
“I’m really proud of what Nate and our coaching staff have done,” President of Basketball Operations Kevin Pritchard said.