Matic was in the final four months of his contract and would have been a free agent at the end of the season.
The 31-year-old joined the Red Devils in a £40m deal from Chelsea in the summer of 2017, signing a three-year deal with the option of a further year.
United have taken up that option and are even considering offering Matic a longer deal to keep him at Old Trafford beyond the four-year mark.
The news comes as a major turnaround in Matic’s Manchester United career after he looked set for a January exit, having not had a look-in at the beginning of the season.
However, injuries to Paul Pogba and Scott McTominay towards the end of last year, saw Ole Gunnar Solskjaer give Matic his chance, which the former Benfica midfielder grabbed.
The Serbian international has formed a formidable partnership with Fred in the middle of the park that has coincided with an upturn in form which has seen Manchester United win eight of their last eleven games in all competitions and move up to fifth on the league table, three points behind Chelsea in fourth.
Matic has made 22 appearances in all competitions for United this season, including features in nine of the club’s last 10 league games.
