The 48-year-old former Netherlands international’s previous deal would have expired in 2024.
Overmars has held his current role since 2012 and has been instrumental in the development of the likes of Donny Van De Beek, Matthijs de Ligt, Frenkie De Jong and Hakim Ziyech, all of whom have been sold for big money.
Overmars played a crucial part in the appointment of manager Erik Ten Haag, who has returned the club to the upper echelons of European football.
He had started courting interest from the likes of Newcastle United and former clubs Arsenal and Barcelona for a similar role.
'I still feel very excited by my work and get a lot of satisfaction out of it,' Overmars told the club's official website.
'The cooperation with my fellow board members is very good, as well as with the people at the Toekomst (the Ajax sports complex) with whom I work together in the fields of scouting, youth, transfers, and the like.
'I have a feeling that my work at Ajax is not done yet, so I would like to continue here.'
Ajax president-commissioner Leen Meijaard added: "The Supervisory board is very pleased with Marc Overmars as director of football affairs.
"Of course, the performance of the first team under his leadership is most notable. The team, led by Erik ten Hag [head coach], who was appointed by Marc, is exciting and successful, both nationally and internationally.
"Furthermore, we also see the good development in other technical football matters. With Marc in the management team, we think that the upward trend that our ambitious club has been on for a few years can be continued."
