The 36-year-old Nowitzki's contract is for three years and $30 million, with a player option for the final season. It's similar to the deal Tim Duncan signed with San Antonio two years ago. The 38-year-old Duncan recently exercised the option after the Spurs won their fifth title with him.
Tuesday's announcement of the contracts came five days after the Mavericks signed Parsons to an offer sheet worth about $46 million over three years. Houston declined to match the offer to the 25-year-old restricted free agent.
Nowitzki and Parsons will be part of a starting frontcourt that includes center Tyson Chandler, who came back to Dallas in a trade with New York.