Wenger, the longest-serving and most successful manager in the club's history, is delighted to be extending his 14-year reign.
Wenger told the official club website: "My heart belongs to Arsenal and my desire is to see this team win silverware.
"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."