The 27-year-old joined the Royals in January 2005, and has gone on to make 163 appearances for Brian McDermott's side, who secured their return to the English Premier League by winning the Championship title.
"It's absolutely great to have signed this new contract," Federici said.
"I've been here a long time, I've put in a lot of blood, sweat and tears so it wouldn't have been right to do anything other than sign again.
"The club has got great backing, there's a real good feel around the place, the club are only going in one direction and that's upwards."
Reading coach McDermott was pleased to see his first-choice goalkeeper re-commit, and hailed Federici's discipline and desire to succeed.
"I am really pleased to have secured Adam for another three years," he said.
"I have known him for a number of years now, it seems like time has flown and he has constantly been developing into a top-class goalkeeper.
"He is a lesson to young pros about what is required to get to the top of your game. His workrate, diligence and desire are second to none and we're delighted he's chosen to commit to us again."
Sydney-born Federici has earned six caps for Australia since making his full international debut in 2010.
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