The deal will keep James as the highest-paid right tackle in the NFL.
James, 26, was arguably the top right tackle on the free-agent market after starting 62 games for the Dolphins the past five seasons.
The 2014 first-round pick (19th overall) out of Tennessee is coming off his best season as a pro. James, who was the highest-paid right tackle in the NFL last season while playing out his fifth-year option for $9.341 million, helped form one of the best offensive tackle duos in the NFL opposite Laremy Tunsil.
The 6-foot-6, 312-pound James is a strong athlete, which allowed him to pull effectively throughout the season, a task not many tackles willingly and successfully accept.
The previous Dolphins staff had a lukewarm relationship with James, but the new staff was vocal about a desire to re-sign him.
"We sure hope he does [stay]," new offensive line coach Pat Flaherty said Feb. 14. "He's a good football player."
But Miami is undergoing a rebuild, and the price to re-sign James exceeded what it wanted to spend. The Dolphins plan to rebuild their offensive line through the draft.
ESPN's Cameron Wolfe contributed to this report.