Semin, 23, is earning $1.2 million this season and would have been eligible for restricted free agency in the summer. Instead, he'll make $4.2 million in 2008-09 and $5 million in 2009-10.
The native of Krasjonarsk, Russia was second on the Capitals last season with 38 goals, 35 assists and 73 points in 77 games, all career-highs.
Semin, six foot two, 205 pounds, has only played in three games this season because of an ankle injury, posting one assist.
Washington chose him 13th overall in the 2002 draft.