Past severe droughts over North America have led to massive water shortages and increases in wildfire frequency. Triggering sources for multi-year droughts in this region include randomly occurring atmospheric blocking patterns, ocean impacts on atmospheric circulation, and climate's response to anthropogenic radiative forcings. A combination of these sources translates into a difficulty to predict the onset and length of such droughts on multi-year timescales. Here we present results from a new multi-year dynamical prediction system that exhibits a high degree of skill in forecasting wildfire probabilities and drought for 10-23 and 10-45 months lead time, which extends far beyond the current seasonal prediction activities for southwestern North America. Using a state-of-the-art earth system model along with 3-dimensional ocean data assimilation and by prescribing the external radiative forcings, this system simulates the observed low-frequency variability of precipitation, soil water, and wildfire probabilities in close agreement with observational records and reanalysis data. The underlying source of multi-year predictability can be traced back to variations of the Atlantic/Pacific sea surface temperature gradient, external radiative forcings, and the low-pass filtering characteristics of soils.