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Mike Daniels agrees to four-year contract extension

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New deal makes Mike Daniels among highest paid at his position (2:43)

ESPN Packers reporter Rob Demovsky explains why DE Mike Daniels is worth his new contract with the Packers. (2:43)

GREEN BAY, Wis. -- Mike Daniels is now one of the highest paid 3-4 defensive ends in the NFL.

The Green Bay Packers signed Daniels to a four-year, $42 million contract extension Monday, a source told ESPN NFL Insider Adam Schefter. The deal contains a $12 million signing bonus and will pay Daniels $22 million over the first 15 months, the source said.

The $10.5 million annual average makes Daniels the third-highest-paid 3-4 defensive end in the league. He now ranks behind only Houston's J.J. Watt ($16.7 million) and Arizona's Calais Campbell ($11 million) at his position.

Daniels was the Packers' top free-agent priority for the 2016 offseason, but unlike in recent years, general manager Ted Thompson didn't wait until March to strike a deal. With Daniels in the midst of his best season, he and the Packers were able to come to an agreement well before he could test the free-agent market.

The 2012 fourth-round draft pick from Iowa leads all Packers defensive linemen with 41 tackles and 4.0 sacks this season. He has 17.5 sacks in the past three seasons combined, including playoffs.