The full-back's previous deal still had two years left to run but BVB sporting director Michael Zorc admitted that the club were desperate to tie down a player who not only broke into the first team last season, but also the Germany set-up.
"Erik is a great, down to earth boy who fits perfectly with Borussia Dortmund," he told the Bundesliga outfit's official website.
"For us it was very clear that we take account of his excellent athletic development and extend his contract long term."
Durm, who only made his Bundesliga debut last August and yet made Germany's 2014 World Cup-winning squad, was only too happy to extend his stay at Signal Iduna Park.
"Borussia Dortmund have intensively [helped] my development, so that I can be the player I am today," the 22-year-old told the club's official website.
"It is natural for me to appreciate this and bind to me to the club. I am totally convinced of the BVB way. I want to be part of it as long as possible."