The Airtricity First Division champions have tied up the contract of their young forward as well as wrapping up deals with other squad members
Coughlan, 19, has been with the Blues since he was a schoolboy and was part of the team that gained promotion to the Airtricity Premier Division in 2012.
Speaking to the club's official website, Coughlan said that he was 'grateful' for all that the club had done for him during his career.
He said: "Having agreed terms for the coming season, I am grateful for all that has been done for me at Limerick FC and hopefully the best has yet to come."
The Airtricity First Division champions have also re-signed former Republic of Ireland international Joe Gamble, as well as Shaun Kelly, Stephen Bradley and Steven McGann.
Meanwhile, Limerick chairman Pat O'Sullivan has confirmed that the club are set to review applications for the post of manager following the departure of Pat Scully.
"We have advertised the job and we expect to sit down and look at who has applied in the next few days," said O’Sullivan.
"Everyone who needs to see the advert has seen it at this stage, so we will work on that list next week and we hope to have had at least the first round of interviews over in the coming weeks," he said.