The deal was reported by ESPN.com on Tuesday and announced by the club Wednesday. The 27-year-old Price, who made $4.35 million last season, will make $10.1125 million in the coming season, the Rays said. He will be eligible for free agency after the 2015 season.
Price is 61-31 with a 3.16 ERA in the big leagues. He has made three straight All-Star teams, and went 20-5 with a league-leading 2.56 ERA last season to narrowly edge Detroit's Justin Verlander for the Cy Young Award.
He tied Jered Weaver for the league lead in wins and winning percentage and was sixth in strikeouts with 205 in 211 innings.
Price was the first overall pick in the 2007 draft out of Vanderbilt. He was promoted to the majors late the following year, when Tampa Bay made an improbable run to the World Series. In 2010, he became the youngest pitcher to start an All-Star Game since Dwight Gooden in 1986 and finished second to Seattle's Felix Hernandez in Cy Young balloting after going 19-6 with a 2.72 ERA.
The ace of one of the deepest rotations in baseball last season, Price will be counted on even more in 2013 following a six-player trade that sent right-handers James Shields and Wade Davis to the Kansas City Royals in exchange for four minor leaguers, including top prospects Wil Myers and Jake Odorizzi.
ESPN The Magazine's Buster Olney contributed to this report. Information from The Associated Press also was used.