The former Bangladesh coach will have his second stint in the role, having been the Black Caps' bowling coach from 2008-10.
"Shane's been impressive with the structure he's brought to the bowling unit and we're pleased to be able to lock him into a long-term contract," head coach Mike Hesson said in a media release on Tuesday.
"His knowledge of all conditions and his overall experience has been evident during his time with us."
New Zealand open their two-test series against Pakistan in Christchurch on Thursday.
(Reporting by Ian Ransom in Melbourne; Editing by Pritha Sarkar)
