Gronkowski's agent, Drew Rosenhaus, announced the revised deal via social media, posting congratulatory posts to his client on Twitter and Instagram.
Per ESPN and the NFL Network, Gronkowski can receive a maximum of $13.3 million salary in 2018 that will include up to $4.3 million in additional incentives.
Gronkowski, who is signed through the 2019 season will receive $1 million in game bonuses and can earn three additional $1.1 million performance incentives.
The Patriots worked out a similar deal with quarterback Tom Brady earlier this month, adding $5 million in incentives to the three-time NFL MVP's salary for 2018.
In what could be a related move, New England backup tight end Dwayne Allen agreed to take a pay cut to remain with the team, ESPN reported. Allen, who was scheduled to make $4.5 million this season, had only 10 receptions in 2017.
The 6-foot-6, 265-pound Gronkowski posted 69 catches for 1,084 yards with eight touchdowns over 14 games last season.
A second-round draft pick of the Patriots in 2010, Gronkowski has been a touchdown machine since joining the team, reaching double digits in five of his eight seasons, including a career-high 17 in 2011.
Gronkowski has surpassed 1,000 yards four times and has 474 receptions for 7,179 yards in 102 career games (89) starts.
A five-time Pro Bowl selection, Gronkowski's 76 touchdown catches rank third on the all-time list among tight ends, behind Antonio Gates (114) and Tony Gonzalez (111).
Allen will be entering his second season with the Patriots and seventh overall. He spent his first five seasons with the Indianapolis Colts, notching 126 catches and 19 touchdowns in 57 games.