Guardiola has won eight trophies in two-plus seasons with the Catalan club, which leads biggest rival Real Madrid by five points in the chase for a third straight Spanish league title. Guardiola also guided Barcelona to Champions League, Club World Cup, European Supercup, Copa del Rey triumphs and two Spanish Supercups.
Financial terms of the deal were not released.
Should Guardiola see out the deal he will join Johan Cruyff, Jack Greenwell and Frank Rijkaard as the only coaches with four consecutive seasons in charge at Barcelona.
"It's great news for Pep, for Barca and for us (players)," midfielder Xavi Hernandez said Wednesday.
"It's a very happy moment for Barcelona fans." It is Guardiola's second straight one-year extension. He originally agreed to a two-year deal to replace Rijkaard in 2008 after a season spent coaching the club's reserves.
The 40-year-old former Barcelona and Spain player said he preferred to sign one-year extensions to maintain his motivation and for the good of the club, which is experiencing perhaps its greatest period in its 112-year history.
Guardiola, a creative midfielder during his playing days, has stuck to Barcelona's brand of total football instilled by former player and coach Cruyff, with a great reliance on possession, quick passing and tactical movement.
Barcelona will play Real Madrid in the Copa del Rey final on April 20. It plays Arsenal at its Camp Nou Stadium in the return leg of their Champions League last-16 series needing to overturn a 2-1 deficit.