He had signed a new deal that would keep him at the club until mid-2018, a statement said.
Vanhaezebrouck took the club to their first domestic league title in May and a spot among Europe's top 16 after they finished second to Zenit St Petersburg in their Champions League group, ahead of Olympique Lyonnais and Valencia.
"We are of the opinion that we must reward our wonderful achievements and have signed a financially improved contract. We are also showing our ambition by keeping such a top trainer with us for a longer period," chairman Ivan de Witte said.
The 51-year-old has coached at various Belgian clubs since 2000. Gent have been drawn against German side VfL Wolfsburg in the round of 16.
(Reporting by Mark Gleeson; Editing by John O'Brien)
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