The sixth-overall pick in 2020, Herbert is scheduled to earn $4.23 million and $29.5 million in the final two seasons of his rookie deal.
The Chargers and Herbert also are negotiating a long-term extension that is expected to make him among the highest-paid quarterbacks in the NFL.
Philadelphia Eagles quarterback Jalen Hurts and Baltimore Ravens quarterback Lamar Jackson recently set the market, with both agreeing to five-year extensions. Hurts' deal was worth $255 million, with $180 million guaranteed; Jackson, who agreed to terms only 10 days after Hurts, is set to earn $260 million, with a guaranteed $185 million.
Last month at the NFL annual meeting, Telesco said exercising Herbert's option was merely a formality.
Herbert, 25, led the Chargers last season to their first playoff appearance since 2018 and in three seasons has set numerous passing records, including last season passing Andrew Luck for the most passing yards (14,089) through a player's first three NFL seasons.
Telesco also said Friday that the team will not exercise the fifth-year option on linebacker Kenneth Murray Jr.'s rookie contract. Murray was selected with the 23rd overall pick in 2020.