Papley, who requested a trade to Carlton at the end of 2019, is now tied to the Swans until the end of 2028.
The dynamic small forward could have entered next season as a free agent but opted to recommit to Sydney, beaten grand finalists this year.
"The contract didn't take that long to be honest, it all happened pretty quickly during the finals and got it signed off," Papley said on Friday.
"One of the main reasons I signed on was because of this young group.
"They're still learning and I think only half played in their first final this year.
"So we can't wait to get back to pre-season and start working hard again."
The 26-year-old was rookie drafted in 2015 and is now a 141-gamer and All Australian who the Swans were rapt to secure long-term.
"We're thrilled," Sydney's football manager Charlie Gardiner said.
""Few players are as invested and committed to seeing their football club succeed as Tom Papley.
"We all know he is an exceptional player and has well and truly established himself as one of the best small forwards in the competition.
"But equally impressive is his passion and care for the club ... we just love the energy he brings."
Papley, a dual Swans leading goalkicker, kicked 32 goals this season and was pivotal to his club's run to the AFL grand final.
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