Arsenal confirmed the extension after the Frenchman had met with majority owner Stan Kroenke on Tuesday (AEST) before a board meeting on Wednesday.

Wenger's contract was due to expire at the end of June and the Frenchman had been evasive when facing questions on his future over the final months of the 2016-2017 campaign.

But he has now extended his stay, with Kroenke believing he is the best man to secure the club's first Premier League title since 2004.

"Our ambition is to win the Premier League and other major trophies in Europe," Kroenke said.

"It is what the fans, players, staff, manager and board expect and we won't rest until that is achieved. 

"Arsene is the best person to help us make that happen. He has a fantastic track record and has our full backing."

Arsenal revealed Wenger had conducted a full review of the club's activities on and off the field along with chief executive Ivan Gazidis.

And the manager is optimistic a positive transfer market can lead to him meeting the demands of the Gunners' supporters.

"I love this club and I am looking forward to the future with optimism and excitement," said Wenger.

"We are looking at what we do well and how we can be stronger everywhere. This is a strong group of players and with some additions we can be even more successful. We are committed to mounting a sustained league challenge and that will be our focus this summer and next season.

"I am grateful to have the support of the board and Stan in doing everything we can to win more trophies. It’s what we all want and I know it's what our fans around the world demand."

Fans were divided on the issue of the Frenchman's tenure, with many staging protests in a bid to force out the 67-year-old, who took the helm in 1996.

Last week's FA Cup win saw the Gunners finish an otherwise underwhelming season – which saw them miss out on UEFA Champions League football for the first time in 20 years - with silverware, as Wenger lifted the FA Cup for a record seventh time.

A fifth-placed top-flight finish and humiliating Champions League exit, which came in a 10-2 aggregate loss to familiar foe Bayern Munich, was among the reasons for discontent.

But Wenger will now remain in his role until at least 2019, with Arsenal fans no doubt hoping his decision to stay will help keep star forward Alexis Sanchez at the club despite reported interest from Manchester City and Chelsea.

Gazidis insists the growth of Arsenal has been significant over recent years, but says the club are not taking anything for granted.

He said: "There is no complacency anywhere at this club. Our goal is to compete for and win trophies here and in Europe. 

"Everything we do is designed to make that happen and we will be working hard on and off the pitch this summer to improve and make a strong challenge next season. 

"The club has grown beyond recognition in every aspect in recent years and we have the platform to be successful and meet the ambitions we and our fans share."