McCarney's previous contract ranked him near the bottom of the Big 12 Conference, where the median compensation is $1.078 million. He will earn an annual base salary of $925,000 through 2010.
Athletic Director Bruce Van De Velde said McCarney's compensation will be funded entirely without using state tax dollars. Iowa State's football revenue went from $9.1 million in 1999 to $14 million in 2002.
McCarney's 2000 team was the first at Iowa State to win nine games since 1906, the only other nine-win campaign in program history. The Cyclones ended the season with a win over Pittsburgh in the Insight.com Bowl, the school's first bowl victory.
Iowa State went to the Independence Bowl in 2001 and the Crucial.com Humanitarian Bowl this season, despite playing the toughest schedule in school history. The Cyclones played nine bowl teams with a combined record of 75-19.
The 2002 season ended with a 34-16 loss to Boise State, which dropped the Cyclones to 7-7. McCarney, who was an assistant under Hayden Fry at Iowa and Barry Alvarez at Wisconsin, is 36-57 in eight years at Iowa State.