The shortstop's deal, which could be worth up to $223 million if the club option is exercised and incentives are reached, was announced Saturday.
"This is a great day for Wander and for the Rays, and is evidence of the mutual trust between Wander and our organization," Rays principal owner Stuart Sternberg said in a statement. "We are committed to fielding competitive teams year in and year out, and we all expect that Wander's presence and contributions will play a large part in maintaining our standard of excellence."
Tampa Bay won the AL East in 2021, but was eliminated by Boston in the ALDS.
The contract is the largest financial commitment to a player in the Rays' 24-year history. It's also the biggest deal in major league history for a player with less than a year of major league service time.
Franco is the fifth player with less than a year of big league experience to sign a long-term extension with the team. The others are third baseman Evan Longoria (2008), left-hander Matt Moore (2011), right-hander Chris Archer (2014) and second baseman Brandon Lowe (2019).
"The pace at which Wander has developed speaks to his potential," Rays president of baseball operations Erik Neander said in a statement. "We have seen him do special things on the field, particularly for a player that is only 20 years old. He's an exceptionally driven, budding superstar who can contribute to our success for a long time."
Franco made his major league debut June 22 and hit a three-run homer. He batted .288 with 18 doubles, five triples, seven homers and 39 RBI in 70 games. He finished third in the American League Rookie of the Year voting.
Franco put together a 43-game on-base streak to tie Cincinnati's Frank Robinson (1956) for the longest in major league history among players under 21. He went 7 for 19 (.368) with two homers and four RBI in four postseason games.
Franco would have been eligible for free agency after the 2027 season. He gets a $5 million signing bonus, with $2.5 million payments on Dec. 1 and June 1, 2022.
The yearly salary breakdown is: $1 million in 2022, $2 million in 2023 and 2024, $8 million in 2025, $15 million in 2026, $22 million in 2027 and $25 million in each of the last five seasons. The 2033 club option is $25 million, with a $2 million buyout.
Franco's deal also includes salary escalators if he finishes in the top five in voting for AL MVP. If he is traded before April 2, 2029, Franco receives a $3 million assignment bonus. It drops to $2 million if he is dealt on or after that date.