The former Chelsea manager will earn around £170,000 a week at the San Siro until 2012.
Mourinho is now football’s highest-paid coach and it is believed Inter made the offer to fend of interest from Spanish giants Real Madrid.
A club statement said: “In response to the wish of the coach to continue the project started a year ago, a wish welcomed with pleasure by the club, FC Internazionale announces the extension of Jose Mourinho’s contract until June 30, 2012.”
