The deal includes options for two more years. It's the largest guaranteed contract for a pitcher eligible for arbitration for the first time.
The 26-year-old Gonzalez went 16-12 last season — a career high for wins — with a 3.12 ERA in 32 starts and was selected to his first All-Star game. He has reached 200 innings the past two seasons.
"Gio's ample talents are well known and chronicled," Nationals general manager Mike Rizzo said through a team spokesman. "Today's extension was about comfort for both parties. From our end, the two option years and team control were imperative to the extended commitment.
"Now both Gio and our fans can shift their focus and excitement to his debut in D.C. knowing that their relationship won't be ending in the short term."
Gonzalez was acquired in a six-player deal with Oakland on Dec. 23, giving the Nationals a promising rotation that also includes right-handers Stephen Strasburg and Jordan Zimmermann. After finishing last in the NL East in three consecutive seasons, Washington went 80-81 and wound up in third place in 2011.
Gonzalez, who made $420,000 last season, is 38-32 with a 3.93 ERA in 95 games over four seasons, all with Oakland.