Mourinho, who was appointed as Louis van Gaal’s successor at the start of last season, led United to the League Cup and Europa League titles in his first year in charge.
"I am really honoured and proud to be Manchester United manager," the 54-year-old Portuguese, whose previous deal was due to expire in 2019, said in a statement on the club's website.
"I am delighted they feel and trust that I am the right manager for this great club for the foreseeable future.
"We are creating the conditions for a brilliant and successful future for Manchester United. I love my players and it is a pleasure to know that we are going to be together for at least the next three years."
United's executive vice-chairman Ed Woodward praised Mourinho for his "exceptional work rate and professionalism", as well as for embracing the club's desire to promote young players.
"He has brought an energy and a sense of purpose to everything that he does and I am sure that will continue to bring results for the fans and the club," Woodward added.
United are second in the Premier League, behind runaway leaders Manchester City, with the club still competing in the Champions League and FA Cup.
(Reporting by Simon Jennings in Bengaluru, editing by Ed Osmond and Pritha Sarkar)
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