The Super Bowl MVP will receive a $29 million signing bonus and $52 million in guaranteed money. He will be paid $51 million over the first two years of the deal.
"It wasn't necessarily about the money. It was, at that point, about earning that respect and feeling like I was respected around here," Flacco said Monday just minutes after signing the contract that includes $52 million in guaranteed money. "The fact that they have made me that definitely makes me feel good about how I played and how they feel about me."
Flacco led the Ravens to a 34-31 victory over the San Francisco 49ers in the Super Bowl, earning MVP honors by throwing for 287 yards and three touchdowns.
The 28-year-old Flacco is the first starting quarterback in NFL history to make the playoffs in each of his first five seasons. He's led the Ravens to nine wins over that span, tying Tom Brady for most among quarterbacks in the first five years of a career.
Flacco threw 11 touchdown passes and no interceptions during the recent postseason.
Flacco's performance this past offseason almost certainly helped him receive his record-breaking contract, but Flacco said, "I think I'm an asset to this team. ... The fact that we won the Super Bowl just comes with that. If we didn't win the Super Bowl this year, I still think I'm worth the same."
By signing Monday, Flacco avoided receiving the franchise tag, which would have hindered the Ravens' salary cap in 2013.
"I know we have a lot of good players on the team, and I love to play with those guys, so hopefully it works out very good for the organization and we can keep as many people as we need," he said. The Ravens and Flacco's agent had been in talks for more than a year, but the agreement was reached Friday.
"Joe's a Raven in his style of play, the way he works and prepares, and the way he lives his life. He's a significant reason we've been to the playoffs five years in a row, played in three AFC championship games, and now, we are the Super Bowl champs with Joe as MVP," general manager Ozzie Newsome said in the statement announcing the extension.
Flacco said he learned about the deal while at his uncle's house for family pizza night. He doesn't have any big plans for the money.
"I'm not going to do anything crazy," Flacco said. "All the celebration I can take is going out and enjoying a nice little time with the people that are close to me and looking at each other saying, 'Man, can you believe where we are?'"
Flacco turned down a contract before the 2012 season that would have paid him roughly $15 million a year. His decision turned out to be a wise one.
"I thought I was worth more and didn't really see any circumstances where I wouldn't end up getting paid more than what they were willing to give me at that point," Flacco said.
That assessment was as precise as one of his many sharp spirals in the Super Bowl.
"The real risk is that I could get hurt," he said. "I always kind of had faith that we were going to get something done here no matter what. I didn't know if we were going to go win the Super Bowl and all of that, so that kind of helped the situation out, I think, a little bit."
Information from The Associated Press was used in this report.