League sources told ESPN and NFL Media that Peters agreed to a three-year, $42 million deal with the Ravens. Baltimore confirmed the extension but didn't disclose the length of the contract or its financial details.
The agreement includes $32 million guaranteed, according to ESPN. The contract will pay Peters about $20.5 million in the first year.
Peters has made a huge impact with the Ravens since the team acquired him in a trade with the Los Angeles Rams in October. Baltimore traded a 2020 fifth-round draft pick and linebacker Kenny Young for Peters on Oct. 15.
Since joining the Ravens, Peters has returned two interceptions for touchdowns and broke up a last-minute pass against the Buffalo Bills to clinch a postseason berth. He was selected to his third Pro Bowl this season, and Baltimore has allowed the fewest points and second-fewest yards in the NFL.
Peters leads the league with 27 picks and seven defensive scores since entering the NFL in 2015 as a first-round pick by the Kansas City Chiefs.
Entering Baltimore's matchup against the Pittsburgh Steelers on Sunday, Peters has recorded 52 total tackles, five interceptions, 14 passes defensed and three defensive touchdowns in 15 regular-season games between the Rams and Ravens this season.