The Panthers signed Short to a five-year deal Monday, meaning the star defensive tackle will be under contract with Carolina through the 2021 season.
The team did not disclose financial terms, but sources told ESPN's Adam Schefter that the deal is worth $80 million. The contract also includes $45 million in total guarantees and will pay Short $40 million over the first two years, sources told Schefter and ESPN's Dan Graziano.
The Panthers had used the non-exclusive franchise tag on Short on Feb. 27 and had until July 15 to sign him to a long-term contract.
The Panthers had place the franchise tag on Norman last year, only to later rescind the offer after being unable to reach terms on a contract extension with the Pro Bowl cornerback. Norman became a free agent and signed a blockbuster deal a few days later with the Washington Redskins, leaving a gaping hole in Carolina's secondary.
"I knew it wasn't going to turn it out like [Norman's situation] because I knew I was either going to sign the [franchise] tender or get an extension," Short said Monday on a teleconference. "That whole Josh Norman situation, that is still my guy and I talk to him a lot, but I knew it wasn't going to go that route."
The Panthers tried to sign Short to a long-term deal last year after he made the Pro Bowl in 2015, but he was looking for a deal in the range of $17 million per season while Carolina was offering a contract in the $13 million to $15 million range.
The $16 million per season average puts him third among current NFL defensive tackles, behind the Dolphins' Ndamukong Suh ($19.06 million) and the Eagles' Fletcher Cox ($17.1 million), according to ESPN Stats & Information.
Only quarterback Cam Newton ($20.8 million) has a higher average salary on the Panthers' roster, according to ESPN Stats & Information.
"It means everything just to put myself in this position," Short said. "It comes with hard work and actually the teammates that I have. And believing in God was one of the biggest things as well.
"Just having that drive to be better. That's what it came down to."
Short said he wanted to stay with the Panthers because they took a chance on him with a late second-round pick in 2013 when other teams passed him over.
"They believed in me from day one," he said.
In a statement released by the team, Panthers general manager Dave Gettleman said: "KK has been very important to what we've been able to accomplish on defense. In 2013, when we drafted KK, I thought he was the best pass-rushing defensive tackle in the draft, and he's been able to develop into one of the top young defensive tackles in the NFL. Off the field, KK is a top-notch young man and great representative of our team. I'm absolutely thrilled that we were able to get this deal done."
Short, whose production dropped from a team-high 11 sacks in 2015 to six this past season, said he wanted to remain with the Panthers even if it meant the franchise tag.
"KK consistently affects the quarterback and is strong against the run," Panthers head coach Ron Rivera said. "The mismatches he creates for us on defense force opponents to be aware of him at all times and give us an edge along the defensive line. He's a great player, but also a quality young man who has the respect of his teammates in the locker room. He's everything we're looking for in a Panther."
Rivera previously had said Short, 28, was "too important of a player'' for Carolina not to re-sign.
Short has 22 career sacks, 179 tackles, six forced fumbles and five fumble recoveries. He was selected to the Pro Bowl in 2015, when the Panthers went 15-1 in the regular season and reached the Super Bowl.
ESPN's David Newton and The Associated Press contributed to this report.