Using some of the financial flexibility they gained in the recent Ty Lawson trade, the Nuggets are finalizing a contract extension with forward Danilo Gallinari and will also sign free agent Darrell Arthur, according to NBA sources.

The total value of Gallinari’s deal will be three years and $45 million. He’ll get a bump in pay that starts this season that will raise his salary from $11.5 million to $14 million.

Gallinari, 26, had a resurgence in his game late last season after working his way back from two ACL surgeries.

He averaged 12.4 points and 3.7 rebounds per game last season. But after the All Star break those numbers ballooned to 18.6 points and 4.8 rebounds per game. He shot 44.3 percent from the field and 40.4 percent from 3-point range.

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Arthur, a 6-foot-9 forward, will return to the Nuggets for a third season. He has become one of the team’s best defenders. He averaged 6.6 points and 2.9 rebounds per game last season in a reserve role.

Christopher Dempsey: cdempsey@denverpost.com or twitter.com/dempseypost