The new deal will keep the 18-year-old at Old Trafford until at least June 2020 with an option to extend for a further year.
Rashford told United’s official website: “I am delighted to have signed a new contract.
“I have always been a Manchester United fan, so to be playing in the first team really is a dream come true.
“I am grateful for having the chance to prove myself. To be able to play football at the biggest club in the world means everything to me and my family.”
Rashford was handed a first-team debut for the Europa League clash with Midtjylland.
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The Portuguese legend has headed home from the World Cup in Russia but there is no doubt he made his mark.
Liverpool have unveiled their new home kit for next season, sticking with the hugely popular retro styling of the current shirt.