The extension for Winslow, 22, underscores the Heat's continued belief that he can be a key player on an Eastern Conference contender.
Roc Nation completed the deal with Heat president Pat Riley and general manager Andy Elisburg on Friday afternoon, league sources said. Miami holds a team option in the third year of the deal, sources said.
Winslow was eligible for his rookie extension as part of the NBA's draft Class of 2015 and faced a Monday deadline to complete an extension. Without an extension, those players can enter restricted free agency on July 1.
Current teams can match offer sheets and retain restricted free agents.
"I'm just excited,'' Winslow told reporters after the Heat's preseason game Friday night. "I'm invested in this team, in this city. It's nice to get it done before the season so I can just go out there and play, open mind, open heart. I'm committed to this team and committed to this city.''
The signing of Winslow's extension comes with short-term financial implications in any trade scenario that would make it extremely difficult for Miami to include Winslow into an outgoing deal.
After surgery to repair a torn shoulder labrum shortened what began as a promising 2016-17 season, Winslow played 68 games a season ago and averaged 7.8 points, 5.4 rebounds and 2.2 assists for the Heat.
He was a second-team NBA All-Rookie selection in 2016, and a member of Duke's national championship team in 2015. He was the 10th overall pick in the draft.
Winslow is the third member of the NBA draft's Class of 2015 to agree to a rookie extension. Minnesota's Karl-Anthony Towns (five-year, $190 million) and Phoenix's Devin Booker (five-year, $158 million) signed max extensions.