Edwards, a key part of Warren Gatland's set up since 2008, had been linked to a role alongside new England head coach Eddie Jones as the Australian tries to rebuild the team in the wake of their humiliating early exit from the World Cup this year.
"I'm delighted to have signed a new contract with the Welsh Rugby Union and to continue to be part of an environment I really enjoy working in," the 49-year-old former rugby league great said in a WRU statement.
"As a coach it is fantastic to work alongside such a dedicated and talented group of players and to be part of a strong management team. Warren has assembled a great team off the field and it's a great environment."
Since Edwards began working with the WRU, Wales have won three Six Nations titles and reached the semi-finals and quarter-finals of the 2011 and 2015 World Cups.
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"It is extremely positive for the WRU and the national squad to announce we have secured Shaun's services for another four years," WRU chief executive Martyn Phillips said.
"Shaun has shown great loyalty to Wales since he came into the role back in 2008 and as the squad prepare for their next campaign, and looking further ahead to the next four-year cycle, it is important they have the structure and resources in place."
(Reporting by Martyn Herman; Editing by Tony Jimenez)
