Simeone has been in charge of Atletico since December 2011 and is the most successful manager in the history of the club.
The 53-year-old Argentine has won eight major honours during his time as Atletico Madrid boss including two La Liga titles, two Europa League trophies, two UEFA Super Cups and a Copa del Rey.
Simeone has also led Atletico to the finals of the UEFA Champions League on two occasions, losing in 2014 and 2016 to Real Madrid.
Atletico confirmed the news of Simeone's extension with a statement that read: “Diego Pablo Simeone will remain coach of our club until 30 June 2027.
“The Argentine coach signed his new contract in the offices of the Civitas Metropolitano, thus signing the continuity of the project that began in 2011."
Simeone has managed 642 games as Atletico Madrid manager, winning 380 of those.
This term Atletico are fourth on the La Liga table, six points behind leaders Girona with a game in hand.
