Jesus’ previous deal was due to expire this month but he will now remain at the Estadio da Gavea until the summer of 2021.
The 65-year-old Portuguese was appointed as Flamengo manager in June last year and led the team to the Brazilian league title as well as the Copa Libertadores. He has also added the Super Cup of Brazil, Recopa Sul-Americana and Guanabara Cup to his laurels during his short time in Brazil.
Jesus’ stint in Brazil has been so impressive that the number of trophies he has won is more than the four defeats suffered in 52 games with Flamengo.
The former Benfica manager was also in charge when Flamengo made it to the final of the FIFA Club World Cup last year, losing to Liverpool.
"My representatives reached an agreement today with Flamengo's board of directors to renew my contract for another year," Jesus wrote on Instagram.
"My friendly relations with the entire squad, club structure and Flamengo's fans were decisive to touch my heart and spoke louder in my decision.
"Thank you all for your kindness and support."
Jesus tested positive for the coronavirus disease back in March but he has since made a full recovery.
