Embattled Dodgers owner Frank McCourt announced the deal at a news conference Friday morning.
"Another eight years in L.A. That sounds good. I love this city and the fans," said Kemp, dressed in a bowtie and three-piece suit, his voice sounding froggy from a cold.
"I definitely want to spend the rest of my career here. I know how unbelievable LA is when you're winning baseball games."
Kemp, 27, will find out next week whether he has won the National League's Most Valuable Player award for a season in which he hit .324 with 39 home runs, 40 stolen bases and 126 RBIs, challenging for the Triple Crown until the final week of the season.
"I just want to tell you I'm proud of you," McCourt said, looking directly at Kemp. "You've really seen an opportunity and you seized that opportunity. Now it's time to be that leader that you're capable of being. Don't put too much pressure on yourself, it'll come.
"If you continue to grow up as you have the last few years, there's no doubt you'll be the type of leader this franchise has been looking for, for some time."
According to his agent, Dave Stewart, Kemp agreed to take less in the first year of the new contract in order to give the club more financial flexibility. Stewart also said that Kemp asked him to get the deal done quickly, so the team could make a run at some of the top free agents on the market, most notably Milwaukee first baseman Prince Fielder.
"The ballclub needed flexibility, (general manager) Ned (Colletti) was clear in explaining that," Stewart said. "What was important really was the overall package for Matt.
"He's an unselfish kid. It's been his thought all along that he'd like to get somebody else there that they can put in the lineup that can help him, help the team win."
However, general manager Ned Colletti said Friday, the club's payroll will be lower in 2012 than it was in 2011. The franchise will soon be sold in a bankruptcy court auction, mostly likely by Opening Day.
"The payroll is probably going to be lower than it was a year ago," he said. "That's what I've been told."
Kemp will make $12 million in the first year of the contract. Two million of that will comes as signing bonus paid in April 2012. Another $2 million of his $10 million base salary will be deferred until April of 2013.
He will make $20 million in 2013, $21 million in 2014 and 2015 and $21.5 million a year in the following four seasons, through 2019.
Colletti has never signed a player to more than a five-year deal during his tenure as the Dodgers general manager.
"Is there risk? There's always risk," Colletti said. "But I think in his case there's probably less than most.
"We have a great feel for who he is. ... In this day and age, finding somebody that's got power and speed is one of the toughest things to find."
Colletti said there was no clause in the contract restricting the Dodgers' ability to trade Kemp in the future.
Kemp had a season for the ages in 2011. He was the first Dodgers player to lead the NL in home runs and RBIs since Dolph Camilli in 1941 and the first player in Dodgers history to lead the NL in homers, RBIs and runs scored. He is one of five players ever to eclipse 30 homers, 35 stolen bases, 100 RBIs and a .310 average, joining Ken Williams (1922), Barry Bonds ('92), Alex Rodriguez ('98) and Vladimir Guerrero (2002).
"A lot of people tried to put pressure on me this past year and I just rode with it," Kemp said. "Now it's something that I love, the pressure."
But this magical season came after a down year in 2010 when he feuded with Colletti, bench coach Larry Bowa and had his attitude and effort questioned throughout the game.
He left Los Angeles soon after the end of the 2010 season, headed to Arizona to work on his game and his body and came back to spring training leaner and more intensely focused on righting what went wrong the year before.
"I found what it is I need to do to be successful," Kemp said. "Sometimes when you feel yourself falling off a little bit and not doing what you need to do to be successful, you have to go back to what it is that helped you be successful.
"I've been young, I've experienced a lot, I've learned a lot from my mistakes. I try not to make 'em, and I try really hard not to make them more than once."
Ramona Shelburne is a reporter and columnist for ESPNLosAngeles.com. Information from The Associated Press was used in this report.