The 26-year-old Czech native led Detroit with 25 goals last season and also had 21 assists. He has 20-plus goals in each of the past three seasons, including a career-high 29 in 2014-15. In 345 NHL games, he has 99 goals and 95 assists.
The team announced the deal a day after Tatar's arbitration hearing and before the ruling was to be handed down. Tatar will count $5.3 million against the salary cap through 2020-21.
Tatar's cap hit moving forward is the same as Tampa Bay Lightning winger Ondrej Palat, who also signed a long-term deal as a restricted free agent.
Tatar is set to receive $4.875 million this coming season, $5.5 million for each of the following two seasons and $3.2 million for 2020-21. He also receives bonuses of $1.125 million in year one and $1 million in year four.
The Red Wings missed the playoffs in 2017 for the first time since the 1989-90 season. They're moving into a new arena next season and will need a new core of players to return them to relevance. Pavel Datsyuk left the team before last season, and although Henrik Zetterberg had 68 points — his highest total in five seasons — Detroit didn't have anyone else reach 50 in 2016-17.
Tatar, Andreas Athanasiou, Anthony Mantha and Dylan Larkin are younger players Detroit can try to rely on for offensive production going forward, and Tatar has the most experience of that group. Athanasiou is a restricted free agent.