Edwards had been contracted through 2024 but by tying him to a new deal reportedly worth over $3 million, the Panthers have kept him from negotiating with rivals from the November 1 deadline.
The extension is a major boost for the Panthers in their ongoing fight to keep elite talent in-house amid four years of dominance.
The Panthers have had to farewell premiership heroes Viliame Kikau, Api Koroisau, Matt Burton and Kurt Capewell in the past two years, all of whom were able to seek richer contracts elsewhere.
Stephen Crichton and Spencer Leniu will also leave at the season's end.
But the cut-throat roster management calls have permitted the Panthers to sign their star fullback to a rich long-term deal, similar to those already inked by Nathan Cleary, Isaah Yeo, Brian To'o, Liam Marnit, Moses Leota and James Fisher-Harris.
The Panthers will now turn their attention to negotiating a new contract with five-eighth Jarome Luai, whose current deal expires at the end of 2024.
Coach Ivan Cleary has previously insisted Penrith had the wherewithal to keep both Luai and Edwards, two of Penrith's most important players.
By the time Edwards' new contract expires, he will be 32.
"Re-signing with the club is huge for me and my family," Edwards said.
"I'm really grateful that this club gave me my debut and then for them to show faith in me to be able to extend my stay here is really pleasing and I'm looking forward to it."
Edwards made his NRL debut for the Panthers in the 2016 season and has gone on to play 127 first-grade games.
He was a member of Penrith's 2021 and 2022 grand final-winning teams, famously playing the first of those on a broken foot that the Panthers did not disclose publicly until after the game.
For his efforts in last year's premiership victory, Edwards became only the third Panther in history to receive the Clive Churchill Medal as man of the match on grand final day.
His tackle on a runaway Bailey Simonsson drew comparisons to Scott Sattler's chase on Todd Byrne in the 2003 decider, a similarly pivotal moment in the Panthers' grand final history.
Edwards has developed a reputation for his reliability in attack and defence, his work ethic and vital yardage carries.
Most recently, the Panthers looked lost without Edwards in the hefty round-26 loss to Parramatta, from which he was rested in preparation for the finals.
"I'm super happy to have Dyl locked in for another four seasons," coach Ivan Cleary said.
"Dyl belongs here at Panthers. He has spent a lot of time playing with the core of our team and I am excited for what he and the team can achieve in the coming years."
