The contract, which likely won't be finalized until late fall, makes the 38-year-old the second highest paid coach in the Southeastern Conference. Kentucky's Tubby Smith signed on to a $20.25 million contract over eight years in April.
"I'm very proud to be a Florida Gator, and I'm certainly very appreciative of the commitment that the University of Florida has made to its basketball program, to me and to my family," Donovan said in a statement. "I look forward to being the head coach at the University of Florida for many years to come."
The coach, in his seventh season at Florida, has led the Gators to five consecutive NCAA Tournaments, including the championship game in 2000. He holds a record of 149-73 while in Gainesville.
The contract raises Donovan's annual salary by about $500,000. Despite ongoing speculation that Donovan is eventually headed for a career in the NBA, the latest extension appears to state otherwise.
"His commitment has been relentless, his work ethic has been spectacular," Athletics Director Jeremy Foley said. "I mean, that guy is amazing. This is where he needs to be. It's important to send a message to him and a message to our fans that this is our guy. And hopefully we've done that."