The Frenchman has extended his 21-year reign at the helm of the Gunners
According to the BBC, the Frenchman met with club owner Stan Kroenke on Monday to reach this decision, which was communicated to the club's directors on Tuesday.
This new development comes days after the 67-year-old led North London giants to their their record 13th FA Cup triumph, beating Chelsea 2-1 in the final played at Wembley on Saturday.
Wenger has been in charge of Arsenal for the last 21 years, winning 16 trophies - including three Premier League titles and seven FA Cup titles.
Arsenal finished fifth in the 2016/17 Premier League season, 18 points behind champions Chelsea.
It was the first time the Gunners have missed out on a top-four place under Wenger.