Martinez took over in June last year as David Moyes' successor and enjoyed success in his first season in charge, leading Everton to a fifth-placed finish in the Premier League and a UEFA Europa League berth.
And the former Wigan Athletic boss has been rewarded by the club's hierarchy with a deal that will keep him in charge until at least the end of the 2018-19 campaign.
In a statement on the club's official website, Martinez said: "I am delighted to have been given the opportunity to make a further commitment to Everton.
"I loved my first season at the club. I could not be more proud of the way Everton performed throughout the entire season and the memories we were able to make together.
"I am really excited about next season. I knew from the moment I arrived at Everton that this was a special place and I'd like to thank everyone associated with the club, the board, all the staff, the players and our brilliant supporters for believing in me and giving me the opportunity to build on the traditions and success of this great club."
Everton won 21 league games under Martinez last term as they set a new club record Premier League points tally of 72.
Club chairman Bill Kenwright was glowing in his praise of the 40-year-old Spaniard.
"In many commentators' eyes, Roberto Martinez is the best young manager in Europe," said Kenwright.
"We agree. He took on an unfamiliar challenge for most managers; to take something really good and make it even better.
"He has succeeded. In his debut season he broke our Premier League record points haul, got us back into Europe and developed some of the most exciting young footballers in the game.
"There is no magical ingredient to what we do at Everton. We're a football club and we recognise the fundamental importance of our manager.
"And, when we find our man, we empower him. We support and provide him with everything at our disposal.
"We commit to our managers, and we're immensely pleased that Roberto has committed to us. We want the best because only the best will do."
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