Australia head coach McDonald handed new deal until 2027
The 43-year-old has been in charge since 2022 and masterminded World Test Championship and one-day World Cup titles, and an away victory over England to retain the Ashes.
Australia are ranked number one in the ICC Test rankings and two in one-day and T20 cricket, although they suffered an early exit from the T20 World Cup in June.
"Andrew has proven to be an outstanding men's head coach who as well as delivering exceptional results has built a strong coaching team, methodology and an excellent environment for the team to perform at its best," said Cricket Australia CEO Nick Hockley.
"We are delighted to extend his tenure for a further two years."
Former Test all-rounder McDonald took on one of the most high-profile jobs in cricket initially on an interim basis following the shock resignation of Justin Langer.
"The professionalism, commitment and experience of my fellow coaches and the wider staff have ensured the journey has been extremely successful," McDonald said Wednesday.
"But just as importantly (it has) created a culture of unity, trust and inclusivity.
"International cricket has many challenges for all teams and I am particularly proud how the group, players and staff, across all formats have navigated those together."
Australia face India in a blockbuster five-match home Test series starting on November 22 in Perth.