The announcement of the deal came in the wake of reports that the Jaguars had been reviewing their options to possibly replace Bortles, who guided Jacksonville to the AFC Championship Game last season.
The contract, which will keep Bortles with the franchise through the 2020 season, was universally praised by teammates, whose reactions were posted on the team's website.
"No. 5 is our guy," Jacksonville defensive lineman Malik Jackson said. "He's been through a lot and proved a lot last season. He's the type of guy we want in our locker room and I look forward to having him back for many more years."
Going into the 2017 season, Bortles appeared to be fighting for his job. The third overall pick in the 2014 NFL Draft had struggled, leading the league in turnovers with 63 from 2014 to 2016.
In leading the Jaguars within one win of advancing to the Super Bowl, Bortles connected on 60.2 percent of his passes for 3,687 yards and 21 touchdowns with 13 interceptions during the regular season.
"I've had the pleasure of seeing Blake mature and progress for the past four years and the one thing that I admire the most about him is his attitude," veteran tight end Marcedes Lewis said. "He is an ultimate competitor and will do whatever he can to help the team win. That's his only goal.
"He's not worried about personal credit or accolades; his sole focus is on being a great leader and a great teammate and I am very excited for him and his family on a very well earned extension. I can't wait to be back on the field with Blake and my other teammates in April."
Bortles is 21-40 as a starter in four seasons with Jacksonville, but he did not commit a turnover in three playoff games last season and threw for 293 yards in a 24-20 loss at New England in the AFC title game.
"We've always trusted Blake and we're excited that he'll lead our offense for years to come," Jaguars center Brandon Linder said. "He's one of the toughest guys I know and I'm confident that he'll continue to make us better on a daily basis."
For his career, Bortles has thrown for 14,928 yards and completed 59.1 percent of his passes with 90 touchdowns and 64 interceptions. His rushing totals are 1,410 yards and seven touchdowns.