The Bundesliga's Rookie of the Season in 2017-2018, Harit has displayed fine form this term for a Schalke side that sits fourth in the table, contributing six goals and four assists.
His previous deal was set to expire at the end of next season, and the Morocco international had been linked with a move away from Gelsenkirchen.
"Extending Amine's contract is a great moment for our club," said Schalke's sporting director Jochen Schneider. "He has, of course, attracted the attention of many clubs through his outstanding achievements in recent months.
"During talks about his future, however, it became clear that he knows and appreciates what he has at Schalke 04 and that he feels in good hands with us in every respect."
Head coach David Wagner said: "Amine is one of the many players between 19 and 23 years old with a great deal of potential and represents the sporting future of the club.
"I'm glad that Amine wants to be a part of this group and continue his personal development with us. Over the past six months, he has impressively demonstrated what you can achieve by working hard and consistently pursuing a goal."
Harit hailed Wagner's role in his development, adding: "I do not see my sporting development as having finished and I would like to play European football in the coming years with Schalke."