Smoltz, who turns 40 next month, will receive $14 million in 2008 as part of the deal. The new contract also includes a $12 million option for 2009 that becomes guaranteed if Smoltz pitches 200 innings the previous season. The club has an option for 2010, at a cost of $13 million if he pitches 200 innings in '09 or $12 million if he falls short of that total.
Smoltz is making $8 million this season. The deal for the right-hander, reported earlier Thursday by ESPN The Magazine's Buster Olney, was announced after the Braves arrived in Denver for the start of a three-game series against the Colorado Rockies on Friday.
"Words can't describe how thrilled I am to have the opportunity to finish my career as an Atlanta Brave," Smoltz said in a statement. "I am thankful to the Braves organization for giving me the chance to play this long and to play out my entire career with one team."
Smoltz, who could have become a free agent after this season, has a 195-138 record with 154 saves and a 3.28 ERA. He is one of only two pitchers -- Hall of Famer Dennis Eckersley is the other -- with at least 150 wins and 150 saves in his career.
"This is a significant contract, both for the Braves and for John Smoltz," general manager John Schuerholz said. "We are delighted that John will be a Brave for at least next season and hopefully well beyond that. Through an amazing stretch of success, John has been a huge part of our club, both with his pitching and his leadership. He will be a first-ballot Hall of Famer."
Smoltz won the NL Cy Young Award in 1996 and has nine seasons with at least 14 wins. Also, he holds postseason records for wins (15) and strikeouts (194).
"This is great news because John is such an important part of our ballclub," manager Bobby Cox said. "He has been a dominating pitcher and leader in this league for years and is probably pitching as good right now as he ever has."
Smoltz began his career as a starter, but moved to the bullpen in 2001. He spent three full seasons as the Braves closer, setting an NL record with 55 saves in 2002.
Since returning to the rotation in 2005, Smoltz has gone 32-17 with a 3.34 ERA in 73 starts. He was 16-9 with a 3.49 ERA and 211 strikeouts last season.
Information from ESPN The Magazine's Buster Olney and The Associated Press was used in this report.