The highly-rated coach has opted to renew his existing deal and will remain in charge of the Nationalelf through the 2016 European championship.
Low's previous deal was due to expire after the 2014 World Cup, but he has now ended all speculation about his future by signing a two-year renewal, one that he had been hinting at for some time.
"Working with the team and the coaching staff makes me very happy," Low said at a press conference. "I feel great motivation to develop the team.
"We are not yet at the end of our journey, we have big goals that we want to achieve together."
Low took over as Germany coach in 2006 after previously serving as assistant coach to current USA manager Jurgen Klinsmann and has since turned Die Mannschaft into one of world football's top sides again.
He guided Germany to the final at Euro 2008, where it was beaten 1-0 at Spain, before reaching the semifinals of both the 2010 World Cup and Euro 2012.
The Germans currently sit second in the FIFA rankings and qualified for next summer's World Cup after remaining unbeaten in Group C, racking up 28 points from 10 games.