The former Manchester United, Barcelona, Paris Saint Germain, Juventus and Inter Milan striker helped AC Milan win their first Serie A title in eleven years last season.
The Sweden international, who turns 41 in October, saw his previous deal expire at the end of June.
Ibrahimovic is set to miss the rest of the year after undergoing reconstructive surgery on a knee problem in May.
Ibrahimovic was hampered by a succession of fitness problems throughout the 2021/2022 season, restricting him to just 23 Serie A appearances, although he still managed eight goals and three assists.
“AC Milan is pleased to announce the renewal of Zlatan Ibrahimovic’s contract until June 30 2023,” a club statement read.
“The Swedish forward will continue to wear the number 11 shirt.”
Responding to the announcement on his Instagram page, Ibrahimovic wrote: “The never-ending Zlatan. #ReadyToLeaveAMark”.
Ibrahimovic rejoined AC Milan in January 2020 after leaving Major League Soccer side Los Angeles Galaxy.
The Sweden international has scored 92 goals in 159 appearances across his two spells at AC Milan.
AC Milan have already moved to soften the long-term loss of Ibrahimovic by signing former Liverpool striker Divock Origi on a free transfer.
