NFL.com reported the contract was worth $108 million with $55 million of that guaranteed. That would create more guaranteed money for Romo than was in the contract Super Bowl-winning quarterback Joe Flacco recently signed with the Baltimore Ravens.
Romo becomes the highest-paid player in the 53-year history of the Cowboys and the contract will also reduce the salary-cap hit the team would have taken this year. Romo will collect $11.5 million in 2013 instead of the $16.8 million the Cowboys had originally been scheduled to pay.
"This is a significant day in terms of securing stability for our team for the future," Cowboys owner Jerry Jones said.
"Tony is uniquely qualified to lead this team at the quarterback position for the next several years. He has an abundance of experience and familiarity with our offensive philosophy, our head coach and the personnel around him."
Romo, 32, received a blockbuster deal despite having quarterbacked the Cowboys to just one playoff victory in nine seasons. He was due to become an unrestricted free agent at the end of the 2013 campaign.
Romo threw for a career-best 4,903 yards last season with 28 touchdowns and 19 interceptions. He has compiled 25,737 passing yards and 177 touchdowns in 121 career games.
"I want to thank the entire Jones family for believing and trusting in me to finish my career as a Dallas Cowboy," Romo said. "There will be no greater reward, besides winning a Super Bowl, than playing my entire career as a Dallas Cowboy."