He will be paid a base annual salary of $220,000. With additional payments from professional services relating to the promotion of the program, Self could collect as much as $1.375 million per year.
If he remains at Kansas for the duration of his contract, the base salary increases to $225,000 and additional compensation will increase to $1.6 million annually.
"We are thrilled that Bill Self will be our coach for years to come," said Athletic Director Lew Perkins on the school's Web site.
Self, in his fourth season at Kansas, has a 78-25 record.
The Jayhawks have won a share of the last two Big 12 Conference regular-season titles and the championship of the 2006 Big 12 Tournament.
Self has guided three different schools to the NCAA Tournament's Elite Eight -- Kansas, Tulsa and Illinois.