Brady would have become an unrestricted free agent after the 2019 season. He had been set to make $15 million this year.
News of the extension comes a day after Brady celebrated his 42nd birthday.
On Wednesday, Brady brushed off a question about whether he felt he deserved an extension, but he did speak glowingly of his relationship with The Patriots and staff.
“I appreciate this team and the opportunity it gave me in 2000,” Brady said Wednesday. “I play for a great coach in Coach [Bill] Belichick, and [offensive coordinator] Josh [McDaniels] and I have a great working relationship. I love Mr. [Robert] Kraft and his family. We’ve had just incredible success. Hopefully we can keep it going.”