Solskjaer’s previous deal would have expired at the end of the 2021/2022 campaign.
The 48-year-old first took charge of the club on an interim basis in December 2018 when Jose Mourinho was sacked and was later rewarded with a three-year contract.
Solskjaer led Manchester United to a third placed finish in his first full season in charge and bettered that performance by finishing second in the league last season although they lost the Europa League final to Villarreal and he is yet to win a trophy.
The former Molde and Cardiff City boss will be looking to add trophies in the upcoming campaign to enhance his reputation especially after adding Jadon Sancho to his ranks.
Solskjaer told the club's official website: "Everyone knows the feeling I have for this club, and I am delighted to have signed this new contract. 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.
"I have a fantastic coaching team around me, and we are all ready to take that next step on our journey. Manchester United wants to be winning the biggest and best trophies and that’s what we are all striving for. 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."
Manchester United begin their 2021/2022 campaign at home to Leeds United on August 14.
