Highsmith will make over $27.7 million in guarantees and $38 million over the first two new years of the deal, according to his agents.
The Steelers announced the contract Wednesday but did not disclose financial terms.
"This means everything," Highsmith said in a statement posted to the team's website. "I know I am a Pittsburgh Steeler through and through, and just to be a part of this amazing organization for four more years means the world to me, to my wife, to my whole family. This is where I want to be. This is where I want to play ball. I am unbelievably grateful. I am super thankful to be here and can't wait to get to work. I am excited.
"This organization, it's the history. Everyone here, it's a top-notch organization. It's an amazing place to play. I love playing on this defense. I love the coaching staff. I love everything about it."
Highsmith, 25, was entering the final year of his four-year rookie deal with the Steelers, who selected the linebacker in the third round of the 2020 NFL draft.
Despite not having a long-term deal in place earlier this year, Highsmith participated in Steelers minicamp and OTAs during contract negotiations and expressed confidence that an extension would be completed, saying that he wanted to remain with Pittsburgh for a long time.
Highsmith emerged as one of the NFL's top pass-rushers last season, recording a career-high 14.5 sacks and a league-leading five forced fumbles. He has 22.5 sacks in 49 career games with the Steelers.