Woodley, 26, was one of the NFL's best bargains last season, making just $550,000 in the final year of his rookie contract. Including playoffs, Woodley recorded 60 tackles, 13 sacks and two interceptions. He also become just the second Steeler to record double-digit sacks in three consecutive years, joining teammate James Harrison.
Although the future of the franchise tag is unclear, it's projected to be worth approximately $10.2 million for linebackers in 2011.
This also buys the Steelers time to continue long-term negotiations with Woodley. The "30 percent rule" under the current collective bargaining agreement makes it virtually impossible to work out a big-money deal for the former second-round pick. But the CBA will expire next month, as the NFL and NFLPA continue negotiations to work out a new agreement.