NFL Network insider Jason La Canfora reported the $39 million deal includes $17 million guaranteed, according to a league source. That would make Williams one of the NFL's top-paid defensive linemen, as the extension is similar to the five-year, $40 million deal that New England Patriots defensive tackle Vince Wilfork received in March 2010.
Williams had two years left on his contract, with the extension locking him up through the 2016 season. He will average between $7.5 million and $8.2 million per year depending on if he meets all the contract incentives, a person familiar with the contract told The Associated Press.
"He's real happy to remain a Bill," said Williams' agent, Albert Elias. "Three contracts in five years shows their commitment to winning, and that's exciting."
Williams has been a starter since his rookie season in 2006, when the Bills drafted him in the fifth round out of LSU. He has been the Bills' most consistent defensive player and is coming off a season in which he had a team-leading and career-best 5.5 sacks. That was enough to earn Williams his first Pro Bowl appearance, even though he was a member of the NFL's worst run defense. Selected as a first alternate, Williams was added to the AFC team to replace injured Oakland Raiders lineman Richard Seymour.
Overall, Williams has 13.5 sacks in 78 career games.
Williams and the Bills first opened negotiations about two weeks ago.
The agreement comes at a time when the Bills are being criticized for being cost-conscious. The Bills had a payroll of a little more than $96 million two weeks ago, which put them more than $26 million below their adjusted salary cap number for this season. Only four teams -- the Jaguars, Cincinnati Bengals, Tampa Bay Buccaneers and Kansas City Chiefs -- had more space below their adjusted cap.
The Bills aren't expected to be done restructuring their payroll, as they have several key players entering the final year of their current contracts. It's a group that includes starting quarterback Ryan Fitzpatrick and receiver Stevie Johnson, who ascended into the No. 1 role following Evans' departure. La Canfora reported the Bills would approach Johnson about an extension soon after completing the deal with Williams.
Starting running back Fred Jackson also is unhappy with his contract. He has two years left on it, but he believes he's being underpaid after leading the team in rushing in each of the past two seasons.
The Associated Press contributed to this report.