James, who turns 36 later this month, averaged 25.3 points last season and led the NBA in assists with 10.2 per game. He will be 38 when the contract ends.
This extension will take James through the 2022-23 season, giving him 20 seasons in the NBA. He played 11 seasons in Cleveland over two stints, four with the Miami Heat and will play at least five in L.A.
James is now set to make $39.2 million in 2020-21, $41,180,544 in 2021-22 and $44,474,988 in 2022-23. His career earnings from his NBA contracts will approach $435 million by the end of the extension.
James was named the 2020 NBA Finals MVP after leading the Lakers past the Heat in six games. He became the first player in NBA history to win the award with three franchises; he also was Finals MVP with the Heat in 2012 and '13 and with the Cavaliers in 2016.
His oldest son, 16-year-old Bronny, is slated to graduate high school in 2023.
James, currently No. 3 on the NBA's career scoring list with 34,241 points, is 4,146 points behind Kareem Abdul-Jabbar for the No. 1 spot. If he were to average 25 points and play a majority of games the next two seasons, James would be in position to take Abdul-Jabbar's place at the top while wearing a Lakers uniform in 2022-23.
James also ranks No. 8 on the assists list, No. 13 in steals, No. 15 in 3-pointers made and No. 48 in rebounds.
When it comes to NBA postseason history, James is first in scoring, first in steals, second in assists, second in 3-pointers made, sixth in rebounds and 11th in blocks.
ESPN's Bobby Marks contributed to this report.