Terms of the deal weren't announced, but the New York Daily News reported the team locked him in for six years for a total of $28.2 million.
McDonagh, 24, has provided steady play at the blue line in his three seasons with the Rangers, compiling 12 goals and 48 assists over 169 games over the span.
He has also provided one goal and seven assists in 37 post-season contests with New York.
The St. Paul, Minn., native is coming off a lockout-shortened season in which he provided four goals and 15 assists and a plus-13 rating over 47 regular-season games.
The Rangers are still negotiating with fellow restricted free agents Derek Stepan, Carl Hagelin and Mats Zuccarello.
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