The deal is for four years, averaging $3.5 million annually, a source told ESPN.com.
Grossmann, 27, had been scheduled to become an unrestricted free agent July 1.
The Flyers acquired him from the Dallas Stars in mid-February, sending a 2012 second-round pick and a 2013 third-round pick.
Grossmann, 6-foot-4 and 230 pounds, has six assists, 52 blocked shots, 68 hits, and is plus-5 in 22 games with the Flyers.
Information from ESPN.com's Pierre LeBrun was used in this report.