Lafai will now remain at the Dragons at least until the end of the 2020 NRL Telstra Premiership season.
The Samoan international joined the club last year and has played 29 NRL games for the Dragons to date.
Scoring five tries so far in 2017, the Samoan international has reaped the rewards from a strong off-season.
The 25-year-old was pleased to secure his family’s future at the Dragons beyond the current year.
“I’m excited to spend the next three years at the Dragons,” Lafai said.
“When you’re off-contract it’s always one of those things that sit in the back of your mind, so now I can just fully concentrate on doing my job for the Dragons.
“It’s really great to be able to sort out my future and focus wholly on footy now.”
St George Illawarra Director of Rugby League Pathways Ian Millward said Lafai’s signature was quite the coup for the Dragons considering his popularity in the market.
Millward also said Lafai has been earmarked as a future member of the first grade leadership group as one of the veteran members of the Dragons’ outside backs.
“There were several clubs trying to sign Tim, but what was most evident in our negotiations was that he wanted to stay here,” Millward said.
“Tim is a true professional so we’re really excited to see him remain, not only because of his playing ability but because he’s a good family and clubman.”
Lafai joins the likes of skipper Gareth Widdop, Tyson Frizell, Euan Aitken, Jack de Belin, Paul Vaughan, Jai Field, Jacob Host, Blake Lawrie, Luciano Leilua and Reece Robson to have extended their stay at the Dragons this season.
This was first published on the St George-Illawarra Dragons website