Condra's deal is worth US$2.5 million, and he'll count $1.25 million against Ottawa's salary cap.
Condra played all 48 games last year for the Senators, providing some consistency during an injury-plagued season. He had four goals and eight assists.
The 22-year-old had a goal and six assists in 10 Stanley Cup playoff games. He had eight goals and 17 assists in his first full NHL season in 2011-12.
Condra had filed for player-elected salary arbitration before Wednesday's deadline. The sides settled on this contract before a hearing was necessary.
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