The 26-year-old has become a defensive mainstay for manager Arsene Wenger and strong performances in the English top-flight earned him four caps for France including a trip to Euro 2012.
"Laurent has been outstanding for us over the last two seasons," Wenger told the club's website.
"When you consider that until 2009 he was playing in Ligue 2 in France and that he is now performing at the very top level in the Premier League and for his country, the development that he has shown has been absolutely exceptional.
"Laurent is a top-class player and I am very pleased he has decided to commit his future to the club."
"I'm delighted to have reached agreement with the club. I have had a fantastic time here and look forward to an exciting future with Arsenal," said Koscielny.
