The deal guarantees Escobar $10.5 million and could be worth as much as $21.75 million. The deal was announced at the Royals' training complex with general manager Dayton Moore and manager Ned Yost flanking the 25-year-old shortstop.
"I'm so happy for the situation right now and I want to be here in Kansas City for a long time," Escobar said. "I like to play for Ned. And I'm excited about all the other guys [Moore is] signing, too."
Escobar's long-term deal is the second to be completed during Spring Training. On Feb. 27, catcher Salvador Perez was signed to a five-year guaranteed contract for $7 million with three club options and incentives that could make the deal worth as much as $26.75 million.
The Escobar contract will pay him $1 million this year and $3 million in each of the years 2013-14-15. The club options are for $5.25 million in 2016 with a $500,000 buyout and $6.5 million in 2017 with a $500,000 buyout.
Moore noted that the Royals' defense in 2010 ranked last in the American League, which made the acquisition of Escobar from the Milwaukee Brewers in the Zack Greinke deal a year ago a vital consideration.
"Alcides was the main player in that deal for us," Moore said. "We feel like we needed to have somebody stabilize the interior of our infield. And you can't win championships without a shortstop that gives you that ability to stabilize your infield. Last year I think we were fifth in the American League and Alcides was a huge part of that. ... You can't win without a great shortstop and we have one."
In his first season with the Royals, Escobar led Major League shortstops in assists (459) and putouts (271) while making just 15 errors in 745 chances.
"I think he's a Gold Glove shortstop and he's the best shortstop in the American League, if not in baseball," Yost said.
In 158 games, Escobar batted .254, had 46 RBIs, eight triples and 18 sacrifice hits -- second most in the Majors. He also stole a career-high 26 bases. Batting .203 on June 6, he hit .286 for the rest of the season.
"I'm feeling a lot better at home plate. I'm working a lot with [hitting coach] Kevin Seitzer every day and my goal is to hit .290, .300," Escobar said.
Yost believes Escobar can approach those figures.
"He's just scratching the surface on what he's going to be able to accomplish offensively," Yost said. "I love his energy, I love his personality, I love the way he plays the game. It's infectious to all the other kids we've got in there. He's the perfect piece to our puzzle."
Escobar last season played in the Royals' first 100 games without taking a game off and finished the season playing in 158 of the 162 games.
"I feel I could play 162 games, I could play every day. I don't like a day off," he said.
He's likely to get more time off this year, however, because Yuniesky Betancourt -- the shortstop who went to the Brewers in the Greinke trade -- was signed back as a free agent to be a backup infielder.
Moore is working with club ownership in an attempt to sign more young players in an effort to keep a promising group as a unit.
"Dan and David Glass are determined to keep as many of these young players together as we can, knowing full well that it has to fit within our salary structure and our payroll going forward," Moore said. "It's going to get a little sticky for us, it's going to get a little hairy as we get into 2014-15-16."
Left fielder Alex Gordon, third baseman Mike Moustakas and first baseman Eric Hosmer certainly fall into the Royals' target group.
In addition to Perez and Escobar, the Royals have designated hitter Billy Butler under contract through 2014 with a club option for 2015. The club has options on closer Joakim Soria through 2014. Right fielder Jeff Francoeur and pitcher Bruce Chen are in the first year of two-year deals.
Although talks with Gordon have been held in the offseason, Moore declined to discuss that matter on Thursday, preferring to focus on the signing of Escobar.
"It's important to me," Moore said. "As we've said from day one, we want to keep as many of our players here for a long time. And it starts in the middle of the diamond. It starts at shortstop, it starts at catcher. Center field is a huge weapon in our ballpark as well."
So if Lorenzo Cain, the prospective center fielder, has a big season, his agent might hear his phone ringing next winter.
Dick Kaegel is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.