Dominguez gets $2.5 million this season and $4.25 million next year. The deal includes an $8 million team option for 2025 with a $500,000 buyout.
He had asked for a raise from $727,500 to $2.9 million when the sides swapped proposed arbitration salaries last month and the Phillies submitted $2.1 million
Domínguez had Tommy John surgery on July 30, 2020, and returned to a major league mound on the final day of the 2021 season.
The 28-year-old was 6-5 with a 3.00 and nine saves in career-high 54 relief appearances last year and held opponents to a .197 batting average. He was 2-0 with a 1.69 ERA in nine postseason appearances for the NL champions, getting wins in the Division Series opener against Atlanta and the World Series opener against Houston.
A native of the Dominican Republic, Domínguez is 11-10 with 25 saves, a 3.14 ERA and 165 strikeouts in 135 games since beginning his big league career with the Phillies in 2018.
Dominguez would earn a $100,000 bonus for World Series MVP or winning the Mariano Rivera/Trevor Hoffman reliever of the year award, and $50,000 for finishing second or third for the Rivera/Hoffman award. Domingez would get $50,000 each for making the All-Star team, winning a Gold Glove or Silver Slugger or winning the League Championship Series MVP.