The CBA guarantees the players a pay increase of 7 per cent in 2012, followed by yearly increases of 4, 5.4, 3 and 3 per cent over the course of the agreement.
The deal also includes a $90 million retirement fund to support players, while the average salary of an AFL player will rise to $300,000 by the end of 2016.
The deal in total is worth around $1.144 billion for the AFL's players over the next five years.
The league first put their offer to players and their association executive at the end of August.
The league has agreed to review the deal after three years.
Key aspects of the deal are:
- An average wage of more than $300,000 per listed player by the end of the agreement.
- One of the best retirement schemes in world sport, delivering approximately $20,000 per player per year to their life after football.
- An increase in the minimum wage for rookies to above $50,000 plus match payments.
- Extra payments for star players who promote the game and their clubs.
A midterm review will happen in 2014 and if the parties fail to reach an outcome, the AFL will pay a penalty to the Players' Association of between $3million and $10million.
Depending on circumstances, eligibility criteria for free agency could also be relaxed.
The agreement was signed off as AFL Players' Association delegates met at a conference in the Victorian coastal town of Lorne on Thursday.
Both Demetriou and Finnis said the deal made AFL players the best-rewarded athletes in Australian sport.
"The deal unequivocally makes AFL the best career choice for aspiring young athletes," Demetriou said on Thursday.
"At times it's been tough and robust negotiations but the outcome is a very good one for the game."
AFLPA president and Greater Western Sydney midfielder Luke Power said the deal was testament to the players sticking to their beliefs, and "holding the line" despite the tough negotiations - much of which were played out in the court of public opinion.
"Not one player wasn't happy to be able to go back to their club and their players and tell them that we'd reached a deal that not only satisfied what our objectives were, but didn't compromise any of our values," Power said.
Finnis said player strike action was never formally threatened during the negotiations, as had been rumoured at times.
"Neither party have sought to conduct negotiations where you try to hold a gun to someone's head," Finnis said.
- With assistance from afl.com.au and AAP