Davis, 27, averaged 26.1 points, 9.3 rebounds, 3.2 assists, 2.3 blocks in his first season with the Lakers previous year.
And at 35 years and 287 days old, James is the second-oldest player in league history to be named Finals MVP.
After spending the first seven seasons of his career in New Orleans, the Lakers traded for the former No. 1 overall pick in July 2019.
What's more, the Lakers have developed a tight working alliance with James's longtime business partner, Paul of Klutch Sports.
James is set to make $39.2 million this season, $41.1 million in 2021-22 and $44.4 million in the final year.
Bahrain becomes second country to approve Pfizer COVID-19 vaccine
The Bahraini government says it has conducted more than two million coronavirus tests across the island. Bahrain so far has reported more than 87,000 cases of the coronavirus and 341 deaths due to the virus.
Each NBA team will play a minimum of two and a maximum of four games as part of the league's 49-game preseason schedule. It also aligns with his oldest son, Bronny, graduating high school.
Then the Lakers will begin defense of their World Championship against their city rivals and new coach, Tyronn Lue, who formerly coached Cleveland and LeBron James.
As part of Friday's announcement, the National Basketball Association said it plans to release the first half of the calendar of the regular season of 72 matches of the league "in the next few days".
"We can (repeat). I mean, it's that simple", James said recently on an episode of the "Road Trippin'" podcast. "If we can stay healthy".
James' extension comes as fellow Lakers superstar Anthony Davis mulls his contract options.