A source said that Lockett's three-year extension carries a base value of $31.8 million, a maximum value of $37.8 million and $20 million guaranteed.
The NFL Network first reported the deal.
"This is something that we all dream of as kids, being able to get to this position and being able to know that our family is set and our life is set and stuff like that," Lockett said. "But for me, words can't even explain how I feel. I love this organization."
Lockett's new deal comes a month after Seattle extended left tackle Duane Brown for three seasons, and with free safety Earl Thomas holding out while seeking either a new contract or a trade.
The 25-year-old Lockett was entering the final year of his rookie contract. He joined Seattle as a third-round pick in 2015 and was named a first-team All-Pro as a kick returner after his rookie season. He overtook Jermaine Kearse as the No. 2 receiver behind Doug Baldwin late in the 2016 season but soon after suffered a compound fracture of his leg in a Christmas Eve game against the Arizona Cardinals.
Lockett made it back by the start of last season but estimated recently that he was playing at about 75-80 percent while coming off the injury. He caught 45 passes for 555 yards and two touchdowns and returned a kickoff for a touchdown in Week 17.
Lockett's extension is a sign that the Seahawks have no concern about his health and speed now that he's more than a year and a half removed from his broken leg.
Lockett said his loyalty to Seattle was partly due to the Seahawks allowing him to be more than a returner.
"They've allowed me to grow as a person and they also allowed me to develop into a receiver that I'm continuing to be every single day. ... The fact they were willing to give me an extension because they see me in their future says a lot,'' Lockett said.
Over Lockett's three seasons, he leads the NFL in all-purpose yards (combined offensive and return yardage) with 5,274, according to ESPN charting. The next four on the list are Pittsburgh's Antonio Brown (5,124), Atlanta's Julio Jones (4,739), the Rams' Todd Gurley (4,599) and Pittsburgh's Le'Veon Bell (4,522).
"Tyler's been a great Seahawk, an incredibly productive player. Check his numbers," Seahawks coach Pete Carroll said. "Nobody's done more than he's done in the years that he's been in the league in terms of total yards. He's just been such a great competitor for us. It's a great chance to reward him accordingly and make him a Seahawk for a long time."
Information from The Associated Press was used in this report.