League sources told ESPN's Adam Schefter that the deal is worth $450 million over the 10-year period and could be worth up to $503 million. The extension includes a $140 million injury guarantee, as well as a no-trade clause.
It also includes the ability for Mahomes to have outs if certain "guaranteed mechanisms" aren't exercised, a source told Schefter.
"Since he joined the Chiefs just a few years ago, Patrick has developed into one of the most prolific athletes in all of sports," Chiefs chairman Clark Hunt said in a statement about the quarterback who led the team to its first championship in 50 years.
"With his dynamic play and infectious personality, he is one of the most recognized and beloved figures to put on the Chiefs uniform. He's an extraordinary leader and a credit to the Kansas City community, and I'm delighted that he will be a member of the Chiefs for many years to come.''
Mahomes tweeted about the deal following the announcement Monday.
Here to stay. . .! ⏰⏰ pic.twitter.com/mfwMga3Kl0— Patrick Mahomes II (@PatrickMahomes) July 6, 2020
The Chiefs picked up Mahomes' fifth-year option for the 2021 season in April, putting him under contract for the next two seasons. Mahomes had two years and $27.6 million left on his deal -- $2.8 million this year and $24.8 million in 2021. The 10-year extension puts him under contract with the Chiefs for the next 12 seasons.
Mahomes will receive $83 million-plus in signing bonuses from 2021 to '23 ($21.7 million in '21, $27.4 million in '22, $34 million-plus in '23). Those first three years are fully guaranteed, sources told ESPN's Jeremy Fowler.
The Chiefs added $25 million in incentives over 10 years for Mahomes. Starting in 2022 and for 10 years running, Mahomes will have a $1.25 million incentive for winning the AFC Championship Game and a $1.25 million incentive for winning NFL MVP, a source told Schefter.
With his landmark payout over the next 12 seasons, Mahomes will have the richest valued contract in American professional sports. Mike Trout held that distinction after he signed a 12-year, $426.5 million contract with the Los Angeles Angels in March 2019. Trout's contract is fully guaranteed, however.
Chiefs general manager Brett Veach said this deal has been a priority and thanked Mahomes' agents, Chris Cabott and Leigh Steinberg.
"His abilities are so rare, and to couple that with an incredible personality is outstanding,'' Veach said of Mahomes. "We're going to continue to do everything we can to surround him with talent, and this deal provides us more flexibility to do that. He's obviously an integral part to our success, and we're thrilled he's going to be the quarterback of the Kansas City Chiefs for a long time.''
Orlovsky on Mahomes' extension: 'This is awesome'
Dan Orlovsky explains why Patrick Mahomes' 10-year extension with the Chiefs is good for all parties involved.
Mahomes becomes the fourth quarterback since 2011 to receive an extension before the start of his fourth season, joining Ryan Tannehill (Miami Dolphins in 2015), Carson Wentz (Philadelphia Eagles in 2019) and Jared Goff (Los Angeles Rams in 2019).
The Chiefs said they intended to sign their franchise quarterback to an extension but previously indicated that it might not happen until after this season.
Mahomes, 24, was the MVP of Kansas City's 31-20 victory over the San Francisco 49ers in Super Bowl LIV, making him the first quarterback in NFL history to win a league MVP and Super Bowl before turning 25.
Mahomes is the youngest quarterback to be named Super Bowl MVP. He helped the Chiefs erase a 10-point fourth-quarter deficit by leading three touchdown drives. He finished 26-of-42 for 286 yards with three total touchdowns (two passing, one rushing), two interceptions and a 78.6 passer rating. He joined Tom Brady (Super Bowl XLIX) and Terry Bradshaw (XIV) as the only players to win Super Bowl MVP despite throwing multiple interceptions.
Mahomes was named the NFL MVP after the 2018 season, in which he led the league with 50 touchdown passes and threw for 5,097 yards in his first full season as a starter.
Coach Andy Reid said the best part is that Mahomes is still early in his career. Mahomes doesn't turn 25 until Sept. 17.
"He's a natural leader and always grinding, whether that's on the field, in the weight room or watching film. He wants to be the best," Reid said. "He's a competitor, and his teammates feed off his energy. He makes us all better as an organization, and we are blessed he's going to be our quarterback for years to come.''
The Chiefs traded up in the 2017 draft to select Mahomes with the 10th overall pick. He sat out for most of his rookie season behind starter Alex Smith, starting in only the season finale, when the Chiefs rested their starters.
The Chiefs traded Smith to the Washington Redskins before the following season and made Mahomes the starter.
Overall, Mahomes has thrown for 9,412 yards, 76 touchdowns and 18 interceptions in 31 regular-season games. In five playoff games, he has thrown for 1,474 yards, 13 touchdowns and two interceptions.
The Associated Press contributed to this report.