Mauricio Pochettino and Paris Saint-Germain have agreed to invoke the option of a further year tying the Argentine to the club until 30 June, 2023.
Arriving at the start of January, Pochettino and his staff will be hoping to build on last season's Coupe de France victory by winning back the Ligue 1 title from champions LOSC.
Pochettino: 'A dream come true'
Pochettino told Paris Saint-Germain's official website: "I'm really very happy, for myself and also for my staff. It's very important for us to feel the confidence of the club and we will give our maximum so that the supporters are proud of Paris Saint-Germain. 20 years ago, I was captain of this club and today I am the coach. It's a dream come true."
PSG have been active during the summer transfer window as the club prepare themselves for an important season and Pochettino has the full backing of the club in their pursuit of domestic and European success.
Al-Khelaïfi: 'Excited and confident'
"We are delighted that Mauricio has reaffirmed his commitment to the Paris Saint-Germain family, said Paris Saint-Germain CEO and chairman Nasser Al-Khelaïfi. Having also captained the team 20 years ago, he understands the club values, ambition and vision for the future. With Mauricio’s leadership, we’re excited and confident about what the future holds."