The new deal will run until the end of the 2024/25 season and follow on from the existing contract, which still has two years left to run.
The online bookmakers have sponsored the Parkhead side since the summer of 2016.
Celtic have announced that this is the biggest ever shirt sponsorship deal in Scottish football history.
Chief executive Peter Lawwell told the club’s website: “We are absolutely delighted to secure such a lucrative, long-term arrangement with Dafabet, a fantastic partner with whom we have already enjoyed such a great relationship.
“Celtic is currently in a terrific position on and off the field, achieving regular football success and with an infrastructure of strength and stability. Celtic continues to be one of the world’s great football clubs and through these strong fundamentals we continue to be able to attract and deliver such quality partnerships.
“This announcement represents further great news for the club and our supporters ensuring another positive, high value and high calibre partnership for the future. We thank Dafabet for their continued commitment to Celtic Football Club.
“Agreements such as the one we announce today allow us to look forward with confidence as we strive to ensure Celtic maintains its position as the biggest and best in Scottish football.”