Owens will earn $27 million over the course of the next three seasons, making him one of the highest paid wide receivers in the NFL.
He also will receive a $12.9 million signing bonus as well.
Owens originally signed a three-year contract with the Cowboys in March 2006 after spending a frustrating couple of seasons with the Philadelphia Eagles.
Since then, Owens has been on his best behavior, leading the league in touchdown receptions with 28. He's also third in the league in receiving yards during that same time.
Signing Owens, 34, to long-term deal was considered a priority by the Cowboys this offseason. Despite the fact he's on the tail end of his pro career, he still has proven to be one of the most productive wide receivers in the league.
Last season he caught 81 passes for 1,355 yards and 15 scores. For his efforts he was named to the Pro Bowl where he led the NFL with eight catches for 101 yards and two touchdowns.
