Paul said he constantly ran into fans who were aware he had only one season left on his rookie contract and told him, "We hope you don't leave."
"I truly love this city, everything about it," Paul said. "I never had any plans to leave, contrary to what people may have believed."
Those who hoped the All-Star point guard would remain with the Hornets can relax now.
New Orleans formally announced Paul's contract extension on Wednesday, the first day under NBA rules teams were allowed to publicly discuss offseason roster moves.
Citing team policies, the Hornets did not disclose terms of the deal, but Paul's agent, Lance Young, said when the deal was verbally agreed upon last week that the extension, which takes effect in the 2009-10 season, is for at least three seasons with a player's option for a fourth. Should Paul remain in New Orleans all four years, the total value of the contract would be about $68 million, Young said.
Paul's affinity with New Orleans was not the only factor in his decision, however. The Hornets offered Paul a five-year deal, but Paul was not ready to commit to that because of uncertainty about the future of other prominent players on the squad.
Fellow All-Star David West is under contract for only three more seasons and center Tyson Chandler for two more. Byron Scott, the NBA Coach of the Year, recently signed a new contract for only the next two seasons.
"It's all about winning, to tell you the truth," Paul said.
Last season, Paul led the NBA with averages of 11.6 assists and 2.7 steals. He was the Hornets' second-leading scorer at 21.1 points per game and helped the Hornets reach a franchise-record 56 regular-season victories. He has since been selected to play for Team USA next month at the Olympics in China.
Paul's performance, complemented by his efforts to aid New Orleans' recovery from Hurricane Katrina, may have saved pro basketball in a city that was in danger of losing its pro teams after the devastating storm struck in August 2005.
Sellouts became the norm during the second half of last season and the playoffs.
Marketing Paul as the face of their franchise, the Hornets have sold more than 5,000 new season tickets for next season while retaining about 90 percent of last season's season-ticket holders. The Hornets now have about 10,000 season-ticket holders, the most they've had since moving to New Orleans from Charlotte for the 2002-03 season.