Jardim, 42, has seen his stock rise significantly after guiding the club to the French league title during the 2016-17 campaign — Monaco's first top-flight championship in 17 years.
There had been speculation on Tuesday that the Portuguese — regarded as one of Europe's most promising young coaches — was set to move to the Chinese Super League, per Portuguese outlet A Bola.
However, Jardim has since put pen to paper on fresh terms with Monaco as they look to hold on to their prized assets after a remarkable 2016-17 campaign.
"The confidence the club has shown in me has always been essential to me," he told Monaco's official website.
"I feel part of AS Monaco and of the principality. I'm therefore very happy to continue my work at AS Monaco.
"The last three seasons have been exceptional, crowned by the title of champions of France in May. We will therefore work with the same ambition to continue this project and continue to grow this club with the same passion that has inspired us from the beginning.
"I'm certain that the future looks very exciting at Monaco."
Bernando Silva has already left Monaco to join Manchester City, while Kylian Mbappe, Thomas Lemar, Tiemoue Bakayoko and Benjamin Mendy have all been linked with big-money moves away.
But Monaco have managed to retain the services of key striker Radamel Falcao — who signed a new contract last week — while Jardim's extension will also provide a huge boost for the club.
Monaco established themselves as one of the most exciting sides in Europe after scoring 107 goals in 38 Ligue 1 games to pip Paris Saint-Germain to the league title.
Monaco were beaten by rivals PSG in the Coupe de la Ligue final while Unai Emery's outfit also got the better of Jardim's side in the Coupe de France semi-finals.