The sides made significant progress 2 1/2 weeks ago, when the Ravens increased the guaranteed money in their offer, a league source said. An agreement was reached about midnight Wednesday in a three-way call with Suggs, his agent and general manager Ozzie Newsome.
"This is a good day for the Ravens' franchise," Newsome said.
If no deal had been struck Wednesday, the sides would have had to wait until after the season to sign a deal and Suggs would have earned $10.2 million this year under the tag.
Throughout the past few weeks, Suggs had publicly expressed optimism that the deal would get done.
"I wasn't sure this deal was going to get done even though I kept saying it was close," he said. "I thought the chances were about 50-50, and I definitely didn't want to get franchised again.
He added: "I am glad it is over, and now we can get back to football. Getting this done took compromises on both ends. I wanted to stay in purple and black, the Ravens wanted to keep me in purple and black, and they stepped up and showed me that. This means a lot to me and my family. Now I can be a Raven for the better part of my career."
It was only a year ago when there was a little acrimony when the Ravens used the tag on Suggs.
The sides even settled on a new designation for the tag, "a hybrid defensive end-linebacker," before reaching arbitration. It allowed Suggs to get paid more than a franchise linebacker but less than a defensive end.
He then attended some meetings during offseason workouts and reported back to play in the final two preseason games, which gave him enough time to get ready for the regular-season opener.
Last season, Suggs led the Ravens in sacks for the third time in his career and finished third on the team with a career-best 102 tackles.
"I was already excited to start training camp, and now having Terrell there makes it that much better," Harbaugh said. "He's a foundation for our defense to stay at the highest level. Having him in training camp will take him to higher levels."
The Ravens have a history of locking up their first-round picks who live up to expectations. They have given sizable deals to Ray Lewis, Jonathan Ogden, Chris McAlister, Todd Heap and Ed Reed over the years.
That's why Suggs said he could never envision leaving the Ravens.
