The new deal will keep the 60-year-old in charge at Emirates Stadium until the summer of 2014.
“My heart belongs to Arsenal and my desire is to see this team win silverware,” Wenger told the club’s official website.
“My commitment and drive are as strong and fresh as ever. Signing a new deal means that I can see this talented group of players reach their potential. Trust me, they are ready to deliver.
“With my staff and players we are in front of an exciting challenge and we are looking forward to achieving much success.”
Arsenal chairman Peter Hill-Wood added: “We are thrilled that Arsene has signed an extension to his contract.
“He has masterfully transformed this football club over the last 14 years and the exciting and compelling football we play under his stewardship is admired the world over.
“Arsene is a very talented man and we believe the young, exciting team he has nurtured over the past five years will reward his and the fans’ patience with silverware.”
