Josina Anderson of ESPN reports that the new deal is worth up to $36 million, with $25 million guaranteed.
It was never a foregone conclusion that Chancellor and the Seahawks would come to terms on a new deal.
After the signing, Chancellor said he loves the Seahawks as they gave him his first and only opportunity to play in the National Football League and "I would love to retire here".
In May, some thought that the Seahawks were planning to move on from Kam Chancellor after this season. Two years ago, Chancellor was a training camp holdout because he was unhappy with his contract.
The $12 million average of the three-year extension, based on new money, would make Chancellor the third-highest paid Seahawk behind quarterback Russell Wilson and cornerback Richard Sherman.
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Chancellor is a key cog in Seattle's Legion of Boom defense and that is reflected in the team's payroll. Chancellor hasn't started more than 14 games in a season since 2013. "I'm a positive guy, so I'd rather just keep it on the positive end on both sides".
Kam Chancellor even went as far as to express his desire to remain a Seahawk prior to the extension.
Chancellor previously said he "definitely" trusted that the team would "do the right thing".
He also said he "would love to retire" with the franchise.
The Seahawks have locked up one of their core players through the 2020 season and taken away the chances Chancellor leaves in free agency after this season.