The deal is worth $64 million, with an average salary cap hit of $5.33 million, ESPN.com's Pierre LeBrun reported. That is less than the $6.75 million salary cap average of his current four-year, $27 million deal that expires at the end of the upcoming season.
The new deal will pay Luongo $10 million in 2010-11 and about $6.7 million from 2012-13 through 2017-18; about $3.3 million in 2018-19; and about $1.6 million in 2019-20 before declining to $1 million for the final two seasons.
"I want to win the Stanley Cup," Luongo said on a conference call. "That's why I play. We had to do something that made sense for both me and the team, and I think that's what we accomplished by doing a deal where the money is a bit more front-loaded."
Luongo's deal includes a no-trade clause.
"For me it was more about my love for the game," said Luongo, who is the Canucks' captain. "I just want to play as long as I can. I don't see what's wrong with that."
The three-time All-Star also plans to play for Canada at the 2010 Vancouver Olympics.
"Roberto Luongo is the leader of our hockey team," team president and general manager Mike Gillis said. "He is in the prime of his playing career and has a tremendous desire to make the Canucks a championship team. His leadership, competitiveness and character are what this team will represent for many years to come."
Luongo, 30, posted his fourth consecutive season with 30 or more wins and led the Canucks to the Western Conference semifinals. He set a franchise record for most shutouts in a season with nine and went 242 minutes, 36 seconds without allowing a goal -- the second-longest such streak in the modern NHL.
He was fourth in Vezina Trophy voting as the league's top goalie, finishing one vote short of being a finalist for the third time in his career despite missing almost two months in the middle of the season with a serious groin injury.
The year ended on a sour note though, as he gave up seven goals in a Game 6 loss to Chicago in the second round of the playoffs. Luongo, who indicated during the season he might play out the final year of his contract and become a free agent, said it took a while to get over that loss.
"Unfortunately one game has ruined a lot of things for me, but you try to move on and turn the page because that's not who I am," Luongo said. "I thought we had a chance last year with the team we had and at the end of the day that's all you can ask for."
In 544 career NHL games, Luongo has a career record of 230-232-64 with a 2.57 goals-against average. He is fourth among active NHL goalies for most career shutouts with 47. He was a finalist for the Hart Trophy in 2006-07 as league MVP after posting 47 wins.
Information from ESPN.com hockey writer Pierre LeBrun and The Associated Press was used in this report.