"I'm super happy," Morey said. "I'd love to be with the Rockets for life. This obviously solidifies us for a little while."
Under the 46-year-old executive's guidance, the Rockets have transformed into perennial contenders.
In 2012, Morey authored the multi-player swap with the Oklahoma City Thunder that originally brought James Harden to Houston. He was also the driving force behind the trade that landed star point guard Chris Paul, acquiring him in exchange for seven players after Paul opted into the final year of his deal with the Los Angeles Clippers.
Rockets owner Tilman Fertitta discussed his and Morey's shared outlook for the team's future and hinted at just how lucrative his GM's new contract is.
"We don't like rebuilding. We like to be competitive every year," Fertitta said. "We're on the same page. We look forward to being a successful team for many years to come.
"This makes Daryl one of the highest-paid general managers in the league, which he rightfully deserves."
Morey first joined the Rockets in 2006 as assistant general manager. He was then promoted to general manager in May 2007 following Carroll Dawson's retirement.
The Rockets have made the playoffs in eight of Morey's 11 seasons at the helm. They made it to the Western Conference final in two of the past four seasons but were eliminated by the Golden State Warriors on both occasions.
Prior to his time in Houston, Morey served as the Boston Celtics' senior vice president of operations for three years.