CLEVELAND — Summer vacation is over for LeBron James. It's time to join the work force.

James signed his three-year, $12.96 million rookie contract with the Cleveland Cavaliers, who selected the 18-year-old Akron high school phenom with the No. 1 overall pick in the NBA draft.

"I'm thrilled that he signed," general manager Jim Paxson said Thursday. "It will start his journey of being an NBA player, and that is exciting for us."

James, who already had endorsement deals worth more than $100 million and will soon add more to his bulging business portfolio, will be paid $4.02 million next season by the Cavaliers.

As per the league's collective bargaining agreement, the Cavaliers will pay James $4.32 million in 2004-05 and $4.62 million in 2005-06.

The team has a club option for a fourth year at $5.8 million.

James' contract represents a 20 percent increase on the deal the Houston Rockets gave center Yao Ming, last year's top pick.

Getting James signed quickly was a priority for the Cavaliers, who will have him on their summer league roster.

The team will leave for Florida on Saturday to begin practicing for Orlando's six-team instructional league. James is expected to make his exhibition debut July 8 against the Magic.

"He wants to get down there and start playing," Paxson said. "He's ready to start playing basketball. The kid loves to play."

The Cavs will play in the league through July 12, then head to Boston for games July 14-20. Cleveland is scheduled to play the Celtics on July 14.

James' participation in the summer leagues was one of the few obstacles his agent, Aaron Goodwin, and the Cavaliers had to overcome during their contract talks.

James may have to miss time during the team's stay in Boston if he accepts an invitation to attend ESPN's "ESPY" awards ceremony in Los Angeles on July 16.

That night, James is scheduled to make his television debut as a pro against New Jersey in a game that is being televised by NBA TV, the league's 24-hour network.

Paxson said it's unrealistic to expect James to play in every summer league game.

"Will he play July the 8th, July the 9th, July the 10th? I anticipate he's going to play in games," Paxson said. "Whether he plays in every one — I don't know."

The Cavaliers would prefer James to play as much as possible in the next few weeks. They want him to experience every aspect of the pro game that he can.

Also, coach Paul Silas wants to experiment with the 6-foot-8 James at point guard, the weakest position on Cleveland's roster.

"We want to get LeBron acclimated to the system Paul wants to play," Paxson said. "He's ready for the scrutiny. We want to make sure we bring him along in a way that gives him the best chance to succeed now and heading into training camp.

Like any rookie, James will have his share of struggles as he learns the NBA — on the court and off.

"There's going to be a game where LeBron doesn't have a very good game and people are going to write, 'He's not as good as advertised.' That's going to happen," Paxson said. "You might as well have that happen in the summer. I think LeBron's ready for that."

Goodwin had phone conversations with the Cavaliers on Tuesday before coming to Cleveland for face-to-face negotiations with Paxson and the club's lawyers Wednesday.

The sides finalized the deal Thursday morning at Gund Arena.

Paxson said the discussions went well from the outset.

"From Day One, Aaron has been very good at wanting to work with us in every aspect," Paxson said. "Am I going to sit here and say, 'In the 18 years LeBron plays in a Cavaliers uniform that there won't be any issues?' No. There weren't really any surprises for me once we did sit down and started working through the deal."

Goodwin has had talks with sports-drink giant Gatorade about an endorsement deal for James, who signed a $90 million contract with Nike in May and has an exclusive trading card deal with Upper Deck.