Kimmich had two years remaining on his previous deal but never considered leaving the Allianz Arena.
The 26-year-old joined Bayern Munich in the summer of 2015 and has gone on to make 264 appearances for the club.
Kimmich has won six Bundesliga titles, one UEFA Champions League, three DFB-Pokals among numerous honours during his time in Bavaria.
"The most important reason for my contract extension is that here at FC Bayern I can enjoy my passion every day,” Kimmich told Bayern Munich’s website.
"I have a team with which I can achieve anything, and a lot of my teammates have become real friends. That's why I started playing soccer in the first place: Because it should be fun.
"I don't see myself at the end of my development yet and I am convinced that a lot is possible at FC Bayern in the next few years. In addition, my family feels very comfortable here. Munich has become a second home.
"Of course I want to win the Champions League again. Other clubs in Europe spend a lot of money, but I still don't see them leaving us behind. With the whole package, I'm in the best of hands here. I hope to spend my best years here and achieve great things."
Bayern sporting director Hasan Salihamidzic added: “With this contract extension, FC Bayern is sending a clear signal both internally and externally.
"We want to sign our best players over the long term. Joshua Kimmich will develop his great quality as a leading player at FC Bayern in the next few years and make history.
"He is a world-class footballer with an outstanding mentality and, as a professional and a person, offers everything that has always distinguished FC Bayern."
