Young led the Wizards in scoring last season with a career-high 17.4 points over 64 games. He also averaged 2.7 rebounds and 1.2 assists.
In 295 career games with Washington, Young has averaged 10.9 and 1.8 rebounds.
"Nick is a very good scorer who has continually developed and shown steady improvement over his four years with us," said Wizards president Ernie Grunfeld. "His size, shooting ability and athleticism allow him to get his own shot and compliment our other backcourt players, making him a valuable part of our young core."