Price, who earned $4.35 million in 2012, agreed to the $10.1125 million deal Tuesday. The Rays announced it on Wednesday.
He became the franchise's first 20-game winner in 2012, going 20-5 with an AL-best 2.56 ERA and 205 strikeouts in 211 innings. Price narrowly beat out Detroit's Justin Verlander for the honor that annually goes to the league's top pitcher.
The hard-throwing left-hander is 61-31 with a 3.16 ERA in five seasons with the Rays. The first overall pick in the 2007 draft out of Vanderbilt, Price is a three-time All-Star.
Price, 27, ranks second in club history in wins and is third in innings pitched, strikeouts and starts, while helping Tampa Bay make the playoffs three of the past five seasons. Over the past three seasons, Price's .680 winning percentage is third best in the majors behind Verlander and CC Sabathia.
The ace of one of baseball's youngest and deepest rotations last season, Price will be counted on even more in 2013 following a six-player trade that sent right-handers James Shields and Wade Davis to the Kansas City Royals in exchange for four minor leaguers, including top prospects Wil Myers and Jake Odorizzi.
Price worked seven innings or more in a major league-leading 23 starts last season. He tied Jered Weaver for the AL lead in wins and also held opponents to a league-low .318 slugging percentage.
In 2010, the lefty became the youngest pitcher to start an All-Star game since Dwight Gooden in 1986 and finished second to Seattle's Felix Hernandez in Cy Young balloting after going 19-6 with a 2.72 ERA.