The new deal will keep Scholes at Old Trafford at least until the end of next season.
United boss Sir Alex Ferguson confirmed Scholes’ new deal during the club’s Player of the Year award ceremony tonight.
“It’s been done,” he told MUTV. “I’ve spoken to him and he’s staying. I’m delighted. He knew he’d made a mistake.
“He now realises that if he plays 25 or 30 games next season, they’ll be of real quality. We know our player very well. We’ve had him since he was a kid and we know how to use him.”