Kemp, who led the National League in home run and RBIs, will be a Dodger through at least the 2019 season.
Current Dodger owner Frank McCourt made the announcement at Dodger Stadium.
The deal is the largest in team history. The previous record was held by the contract with pitcher Kevin Brown in 1998 - a $105 million, seven-year deal.
The 27-year-old is the leading contender for NL MVP. He ranked third in the NL with a .324 batting average and tied for second with 40 stolen bases, finishing one home run shy of becoming just the fifth player in Major League Baseball history to hit 40 homers and steal 40 bases.