Since assuming the role from the sacked Mickey Arthur in June last year, Lehmann has steered Australia to seven Test wins out of 13, with two drawn and four lost.
His contract with Cricket Australia was due to end in mid-2016, but he has won an extra year.
“We have been extremely pleased with the results Darren has achieved with the team since he came on board,” CA’s performance manager Pat Howard said in a statement.
“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 was thrust into the spotlight a few weeks before Australia’s 2013 Ashes series in England began when he was appointed to replace Arthur.
The 44-year-old former Test batsman said he was proud of his achievements so far, which have included a five-nil Ashes triumph over England last summer and a 2-1 win in South Africa in March.
“I have thoroughly enjoyed the time I have had in the job and am proud of what we have achieved so far,” he said.
“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.
“I will be judged by results,” he added. “If the team is not performing, then I am answerable.”
Australia begins a two-Test series against Pakistan in Dubai on October 22. (AFP)