The 33-year-old centre agreed to a three-year deal with the Avalanche, the team announced on Wednesday.
Nelson will be paid $7.5 million per season ($22.5 million total) over the life of the deal, Sportsnet’s Elliotte Friedman reported.
He was dealt to the Avalanche at the trade deadline last season after spending the entirety of his career previously in Long Island.
The centre recorded 26 goals and 30 assists in 2024-25 and added another four helpers in the post-season.
Nelson’s previous contract, which began in the 2019-20 season, was worth $6 million per season over six years. During the course of that deal, his 177 goals ranked 23rd in the NHL.