The total value of the new deal is $28.2 million, a source confirmed to ESPNNewYork.com, and comes with an annual cap charge of $4.7 million. It includes a limited no-trade clause for the final three years of the deal.
The agreement also deviates from the Rangers' procedural approach when it comes to restricted free agents coming off entry-level deals. While the club has in the past signed such players to modest two-year "bridge" deals, the Rangers were willing to make an exception for the 24-year-old McDonagh, a workhorse and unique talent on their back end.
The contract, which essentially negates the three years of unrestricted free agency for which McDonagh would be eligible in the summer of 2016, makes the former University of Wisconsin standout the fourth highest-paid player on the Rangers behind Rick Nash, Henrik Lundqvist and Brad Richards.
Though the salary cap dramatically drops to $64.3 million for next season, teams are allowed to operate at 10 percent above the cap -- a cushion that should allow the Rangers to re-sign their remaining players.
Since coming to New York in a trade with Montreal in 2009, a deal that will very likely go down as general manager Glen Sather's most triumphant moment in his tenure with the Rangers, McDonagh has blossomed into a stalwart and leader on the team's back end, particularly in the absence of Marc Staal. With Staal hampered by injuries the past two seasons, McDonagh stepped into a top-pair defensive role on the left side with Dan Girardi.
The St. Paul, Minn., native finished with four goals and 19 points in 47 games for the Rangers this season while logging an average of 24:21 in ice time per game, second only to Girardi's 25:24.