The agreement puts Grossman under contract through the 2011-12 season. Under terms of the deal, Grossman will earn $1.5 million in 2010-11 and $1.75 million the following season.
"We are very happy to sign Nicklas to this new contract," Nieuwendyk said. "He is a solid NHL defenseman and is an important part of our young core."
Grossman, 25, skated in 71 games for the Stars last season, collecting seven assists and 32 penalty minutes. He played on the top pair with Stephane Robidas for most of the season, using his size -- 6-foot-4, 226 pounds -- to make that duo a difficult one to play against.
The native of Stockholm, Sweden, has appeared in 222 career NHL games, tallying 26 points and 109 penalty minutes. He also represented his country at the 2009 World Championships, helping Sweden earn the bronze medal.