The 46-year-old took on the role on the eve of the 2013 Ashes and despite losing 3-0 in England, he went on to guide the team to series wins over South Africa, England, India, New Zealand and West Indies.
The former batsman also won the 2015 World Cup on home soil with Australia, who currently top the ICC rankings in both Tests and ODIs. His contract was due to expire in June 2017.
Australia axe Maxwell, include Henriques for ODI series against Sri Lanka
“I am incredibly grateful for the support and faith the board and the players have put in me,” said Lehmann.
“I absolutely love doing this job and as far as I am concerned, it is the best job in the world.
“There is still a lot I would like to achieve in the time I have left and we have a lot of hard work ahead of us, especially with an upcoming Test series in India and a home Ashes series.
“I don’t just see my job as winning games of cricket. It’s about continuing to grow the game from the grassroots up in Australia, and helping to grow the game worldwide.”
Five-star Herath leads Lanka to win over Australia
Australia are trailing 1-0 in a three-match Test series in Sri Lanka and face a daunting four-match series in India next year.
Cricket Australia said the contract extension would lend stability to the team leading into 2019.
Mendis, spinners hand Sri Lanka advantage
“We wanted certainty and stability for the playing group with both the coach and assistant coach contracted as we build towards the Ashes series and the 2019 World Cup,” said CA executive general manager Pat Howard.
"Darren has had great success in the role and he and the national selection panel deserve a huge amount of credit for taking a relatively young side to number one in the world in two of the three formats.”
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