The deal is getting done just as the Chiefs are getting ready to play one of their most important games in years, at San Diego, in a battle to try to further cement Kansas City's lead in the AFC West.
Charles confirmed the signing on his Twitter account, but the team refused to comment on the contract or even say if Charles had signed an extension.
Charles ranks third in the NFL with 1,137 rushing yards.
He is averaging a league-best 6.2 yards per carry -- nearly a half-yard more than Brandon Jacobs, who is second with 5.8 yards per carry.
Earlier this year, linebacker Derrick Johnson signed a contract extension that could be worth as much as $34 million. Charles and Thomas Jones have made the Chiefs the No. 1 running team in the league, averaging more than 175 yards per game after 12 games.
Adam Schefter is ESPN's NFL Insider. Information from The Associated Press was used in this report.