The Germany international's future had been in some doubt, with several Premier League clubs linked with a move in the summer.
But the 28-year-old forward has dispelled any speculation by putting pen to paper on a fresh deal.
"I have worn this shirt since 2012. I am happy and proud I can announce I will keep wearing it," Reus said.
"This is my home and BVB is my club. Since I was a child I dreamt of wearing black and yellow and to play for this club.
"I am deeply convinced by this step and with signing this contract I want to send a sign for the future."
Dortmund sporting director Michael Zorc and CEO Hans-Joachim Watzke joined Reus in expressing their delight over his renewal.
"Marco improves any team. He is the player for the important moments and the important goals. He is a cornerstone of our attack and futhermore a face of this club," Zorc explained.
Watzke added: "We are very happy that Marco renewed for a long time here, even though the best clubs in the world kept making him offers in the past.
"I have a close personal relationship with him and the talks with him and his agent were in a constructive and harmonical atmosphere from the beginning.
"This player shows the maximum of dedication and we are proud of that."