The WASHINGTON POST’s Katie Carrera reports the Capitals have dealt goaltender Semyon Varlamov to the Colorado Avalanche, details to follow….

The return is a first round pick in 2012 and a second round pick in 2012 or 2013.

SPECTOR’S NOTE: I said for weeks the Avs could be a potential destination for Varlamov,but the question now is, will he sign with the Avs. He’s currently signed with a KHL team, but has said he’d prefer to play in the NHL and would accept less money than he’d made in the KHL. Despite his early injury history, Varlamov has lots of upside, and could be a very good addition for the Avs if they can re-sign him. This move could put the Avs out of the Vokoun bidding. We’ll see…

**UPDATE** TSN’s Gord Miller claims he’s hearing the Avs have signed Varlamov to a deal similar to Montreal’s Carey Price (2 years, $5.5 million).

TSN now confirming Varlamov has signed with the Avs, so forget about his heading to the KHL.