The deal will pay Davis $33.5 million between 2020-21, sources told Jeff Passan of ESPN.
"Oakland has been a special place for me since I arrived," the slugger said in the team's press release. "I love playing here in front of our fans, and my teammates make this feel like a family.
"I never hid the fact that I wanted to stay in Oakland because that is how I feel and I'm glad that I can continue to call the city of Oakland my baseball home. This team has a bright future and I'm thrilled to be a part of it."
The 31-year-old was set to become a free agent following the 2019 season and is already putting together another strong showing, hitting .260/.305/.662 with 10 home runs so far this season. Davis and the Athletics agreed to a one-year, $16.5-million contract this past winter to avoid his final season of arbitration.
Since joining Oakland in 2016, Davis leads all of baseball with 143 home runs - well ahead of Giancarlo Stanton (124), Nelson Cruz (120), and Nolan Arenado (119). Davis has hit at least 40 bombs in each of the previous three seasons and set a career high last year with 48.
Davis' deal is the latest in a slew of contract extensions for impending free agents; Nolan Arenado, Paul Goldschmidt, Justin Verlander, and Chris Sale are among the players who were set to hit the open market before recently agreeing to extensions.
The Athletics are coming off of a surprisingly dominant 97-win season that earned them the second wild-card spot in the American League. Through Wednesday's contests, the A's sit fourth in the AL West with an 11-10 record, led by Davis, Marcus Semien, and Matt Chapman.