The Norwegian, who replaced Jose Mourinho at the Red Devils in December 2018, has signed until at least 2024, with the option of a further year should he still be in the job at that time.
“Everyone knows the feeling I have for this club, and I am delighted to have signed this new contract," Solskjaer said.
"It is an exciting time for Manchester United. We have built a squad with a good balance of youth and experienced players that are hungry for success."
The news comes barely 24 hours after the club announced the signing of England star Jadon Sancho from Borussia Dortmund, with the club making all the right noises as it looks to seal a first Premier League title since 2012-2013.
"Manchester United wants to be winning the biggest and best trophies and that’s what we are all striving for," Solskjaer added. "We have improved, both on and off the pitch, and that will continue over the coming seasons.
“I can’t wait to get out in front of a packed Old Trafford and get this campaign started.”
After a shaky start to his Premier League managerial career, Solskjaer – who spent 11 years as a player with United until his retirement in 2007, winning six Premier League titles and scoring the dramatic winner in its 1998-1999 UEFA Champions League triumph, – led United to a second place finish in 2020-2021 as well as the final of the UEFA Europa League, which it lost to Villarreal in a penalty shootout after a 1-1 draw in normal time.