According to ESPN's Adrian Wojnarowski, the contract also has a player option in the fifth year, meaning Collins could become an unrestricted free agent after the 2024-25 season.
The Hawks extended him the $7.7 million qualifying offer for 2021-22, which made him a restricted free agent. Another team could have thrown an offer sheet his way, something Atlanta did to lure Bogdan Bogdanovic away from the Sacramento Kings last offseason.
As this past season unfolded, it became clear that Collins would have a high price tag on the open market. The Athletic's Chris Kirschner and Sam Amick reported in January he turned down a $90 million extension from Atlanta.
That was after the 23-year-old told Kirschner in March 2020 he thought he was on a path to getting max money:
"I definitely feel like I am in max contract contention. If I finish this season averaging 20 and 10, the other guys who are averaging 20 and 10 are max-caliber guys. I'm in that conversation and feel like I am worthy of being extended as such. That's for the Hawks to decide and figure it out. If you want to look at numbers and flat-out play, I definitely feel like I've earned it. But the team situation, future cap and all that, now you have a contract negotiation."
Collins' production dipped slightly after Atlanta improved its roster during the 2020 offseason, but his performance was largely the same as it had been in years before.
The Wake Forest product averaged 17.6 points and 7.4 rebounds while shooting 55.6 percent from the field and 39.9 percent from beyond the arc. He continued to be a solid contributor for the Hawks in the postseason, putting up 13.9 points and 8.7 boards per game during their run to the Eastern Conference Finals.
Collins was also sixth among power forwards in ESPN.com's defensive real plus-minus (plus-2.28). He allowed opponents to shoot 58.3 percent inside six feet and 36.0 percent from beyond the arc, according to NBA.com.
Still, the Hawks faced a bit of a conundrum with the 6'9" forward.
Unlike others from the 2017 draft class—namely Jayson Tatum and Donovan Mitchell—Collins didn't make it clear he can be a franchise cornerstone going forward. Otherwise, Atlanta wouldn't have allowed him to get to restricted free agency in the first place.
And Andrew Wiggins is a case study in how paying a premium for homegrown talent can backfire. Especially for a franchise poised to contend such as the Hawks, there's a clear downside in having big money wrapped up in a player who isn't delivering as expected on the court.
Having said that, Atlanta's front office is cognizant of the fact that the franchise isn't a marquee free-agent destination yet. By letting Collins go, there was no guarantee a player of similar quality or better would come along over the next few years.
This move isn't without risk, but it is the right decision for the Hawks.