The actor inked a deal with Lionsgate TV this week to appear in the AMC drama's fifth, sixth and seventh seasons, reports Variety.
Hamm previously signed a two-year contract earlier this year but representatives for the star renegotiated the agreement after Mad Men was renewed for a further three seasons "in order to avoid any high-stakes negotiations down the road", a source told the publication.
Industry sources also claimed that the new deal allowed for a significant rise in pay for Hamm and would see him earn just shy of $200,000 (£123,363) per episode by Mad Men's final season.
Reps for Lionsgate and Hamm have not yet commented on the reports.
AMC revealed plans earlier this year to hold back Mad Men's fifth season until 2012, a decision which showrunner Matthew Weiner claimed was "part of the network plan" for the show.
Hamm has previously claimed that Mad Men will end after season seven.
He will make his directorial debut on the first episode of the show's upcoming fifth season.