"Bastian Schweinsteiger has committed the next three years of his career to Bayern," a statement on Bayern's official site read.
Bayern were desperate to clinch the deal as Schweinsteiger's initial contract was due to expire next summer, with several European clubs ready to snap-up the German ace.
"We’re delighted we’ve reached a positive conclusion with Bastian, another very important personality at the club," Bayern chairman Karl-Heinz Rummenigge said.
Schweinsteiger, 24, won the German double on four occasions with Bayern and has become an important member of the national Mannschaft in recent years as well.
The talented midfielder was a key figure in Germany's second-place achievement in EURO 2008. He was also part of the team that finished third in the 2006 World Cup.