The extension is nearly fully guaranteed when he signs. It locks in Jones through the 2023 season and removes a potentially major headache for the Falcons before Sunday's game at Minnesota.
The deal was announced as the team was departing for Minneapolis.
Jones first sought a new contract more than a year ago. He reported for training camp when the Falcons enhanced his current deal and agreed to discuss a lucrative new extension before this season.
Negotiations dragged on far longer than expected, putting in doubt whether Jones would suit up against the Vikings.
"I love this city and I'm committed to being a Falcon for life," Jones said in a statement issued by the team.
The 30-year-old Jones is a six-time Pro Bowler coming off another huge season. Even as the Falcons slumped to a 7-9 record, he had 113 receptions for an NFL-leading 1,677 yards and eight touchdowns.
Heading into his ninth NFL season, he has 698 receptions for 10,731 yards and 51 touchdowns in 111 career games.
Jones sealed his future with the Falcons on the same day Brown was released by Oakland without playing a game for the Raiders after numerous run-ins with coaches and management.
Longtime Falcons quarterback Matt Ryan was thrilled about Jones' extension.
"He's been such a huge part of my career up until this point. Just so consistent. His production is through the roof. Obviously, he's an unbelievable teammate. He's a great friend," Ryan said. "I'd love to play with him my entire career. He's one of the absolute best to ever do it. Certainly lucky to have played with him for as long as I have, and I hope there's a lot more in the tank for both of us."
Even though the Falcons went down to the wire to reach an agreement with Jones, there was no doubt they were committed to a long-term arrangement that would move toward keeping him in Atlanta for his entire career.
"There are a handful of elite receivers and Julio is certainly a part of that group, not only because of his production on the field but his leadership off the field and in the locker room," general manager Thomas Dimitroff said. "Julio has been a cornerstone of our organization for several years and we have always intended for that to continue for years to come."