The new deal, which will keep Graham with the Eagles through the 2021 season, is worth $40 million, a source told ESPN's Tim McManus.
Graham expressed appreciation for his new deal in an Instagram post on Friday.
"I am so happy to be back with the Eagles," Graham wrote. "Can't wait to get back to work. Thank you lord for it all."
The Eagles and Graham had been negotiating since last offseason. Talks gained momentum over the past couple of days at the NFL scouting combine in Indianapolis, as the looming start of free agency created a greater sense of urgency.
Graham played through a high ankle sprain during the 2017 postseason and became a hero of Super Bowl LII with a late strip sack of Tom Brady, helping the Eagles secure their first Super Bowl title.
He ended up needing surgery on that ankle and was not at full strength for much of the 2018 season, finishing with just four sacks. He had 9.5 sacks in 2017.
Graham, who will turn 31 in April and is known for his durability, has missed just one game since the start of the 2012 season.
The 13th overall pick out of Michigan in the 2010 draft, Graham got off to a slow start due to injury and initially was labeled a bust. He has gone on to record 42.5 sacks with the Eagles.