The new deal kicks in prior to the 2020-21 season, bringing Green's total contract length to five years at $118 million.
Green's extension will pay him $22.2 million, $24 million, $25.8 million, and $27.6 million over the duration of the deal.
"We're thrilled to retain Draymond long term as we move forward and into Chase Center," Bob Myers, the Warriors' president of basketball operations, said in a statement. "He's played an enormous part in shaping our organization over the last seven years.
"His passion and knowledge for the game are indispensable to our team. As a multi-time NBA champion, he's surpassed everyone's expectations - except his own."
The Michigan State product was eligible to receive up to $204 million from Golden State or $151 million from any other suitor in free agency next summer, according to ESPN's Bobby Marks. However, only five clubs currently have $25 million or more in cap space going into the 2020 offseason.
With Green locked up, the Warriors have now committed $129 and $138 million to their four max players - Stephen Curry, Klay Thompson, D'Angelo Russell, and Green - in the 2020-21 and 2021-22 seasons, respectively.
Green has been a key piece during the Warriors' run to five straight NBA Finals appearances. His defensive versatility has resulted in him earning NBA All-Defensive first- or second-team honors each season over the past five years. Green was also named Defensive Player of the Year in 2017.
The 29-year-old is coming off a down regular season after averaging 7.4 points, 7.3 boards, 6.9 assists, and 1.4 steals per contest across 66 appearances. However, Green proved his worth during the playoffs, posting 13.3 points, 10.1 rebounds, 8.5 dimes, 1.5 steals, and 1.5 blocks per game.
Since being drafted 35th overall in the 2012 NBA Draft, Green's recorded a team-high 22 triple-doubles and ranks fifth overall in the NBA during that span. He's also one of three players in NBA history to record 200 rebounds and 150 assists in a single postseason, according to ESPN Stats & Info.