The announcement on www.manutd.com ends weeks of speculation that the 22-year-old winger was going to leave Old Trafford and join Real Madrid.
United manager Alex Ferguson said: "It is fantastic news, it emphasises the point that Cristiano is happy here and that he is at the right club. He has a great relationship with the team, staff and the fans and he will go on to be one of Manchester United's great players."
Ronaldo told the site: "I am delighted. I spoke with Sir Alex and David Gill about my future and everyone knew that I wanted to stay. I am very happy at the club and I want to win trophies and hopefully we will do that this season."
His form has been outstanding this season and he is hot favourite to be named England's Footballer of the Year next month.