The 44-year-old has helped revive the fortunes of the Baggy Greens since taking over from Mickey Arthur in June 2013, securing a 5-0 Ashes whitewash last winter.
Cricket Australia executive general manager of team performance Pat Howard said in a statement: “We have been extremely pleased with the results Darren has achieved with the team since he came on board.
“He has helped create an excellent team environment that has seen players thrive. We want that to continue so we used the winter period to work through an extension to his current contract. Importantly it provides continuity for the team and certainty for Darren heading into a critical period for Australian cricket.”
Lehmann, whose side take on Pakistan in a two-Test series beginning in Dubai next week, will now be in charge of Australia for two more Ashes series.
He said: “I have thoroughly enjoyed the time I have had in the job and am proud of what we have achieved so far. I want to continue with the work we have done on and off the field with the team, as I feel we are heading in the right direction.
“It was good to be able to sit down with Pat Howard and (CA chief executive) James Sutherland and go through where we see the team going in the next while. I’m grateful that the board has shown faith in me to continue in the job.
“At the end of the day I will be judged by results, if the team is not performing then I am answerable.
“In the meantime, I am looking forward to this current Test series against Pakistan then getting stuck in as we lead into the biggest summer of cricket Australia has seen in a long time.”
Confusion surrounded the future of the West Indies’ tour of India after the West Indies Cricket Board denied the squad had been called home.
The five-match one-day international series has been overshadowed by an ongoing dispute over payments between players and the WICB and during Friday’s fourth match in Dharamsala, the Board of Control for Cricket in India announced that the WICB had cancelled the remainder of the tour.
That would mean the fifth ODI at Eden Gardens and the subsequent Twenty20 international and three Tests would not take place, but the WICB later insisted in a statement on its official Facebook page - after India arranged a five-match ODI series with Sri Lanka to fill the void - that it “has taken no decision to discontinue the ongoing tour”. The latest development will only add to the bewilderment of the touring West Indies players – not least spinner Nikita Miller, who was only called up ahead of the fourth ODI.