The 24-year-old Czech had been headed to restricted free agency this summer. He made $1.3 million last season.
He appeared in 68 games last season, compiling a 29-28-9 record, 2.91 goals-against average and .906 save percentage.
Pavelec was originally drafted by the Atlanta Thrashers in the second round in the 2005 NHL draft.
Jets backup Chris Mason is eligible to become an unrestricted free agent on July 1. But he says he wants back with the team.
Winnipeg also acquired the rights to Toronto goalie Jonas Gustavsson over the weekend at the NHL draft.