The 21-year-old was set to see his previous deal at Old Trafford expire at the end of the 2019-20 campaign, goal.com reported.
Fresh terms for the England international have been mooted for some time.
United was understandably reluctant to see a highly-rated academy graduate head for the exits after helping to develop him to this point.
Their efforts have now been rewarded, with Rashford committing his long-term future to the Red Devils, though reports suggest he will now earn somewhere between £200,000 and £300,000-per-week.
He told the club’s official website of the agreement and his ambition, “Manchester United has been everything in my life since I arrived here at the age of seven. This club has shaped me, both as a player and as a person, so it is such a privilege every time I get the opportunity to wear the shirt.
“I want to thank Ole and his staff for everything they have done for me; they are the perfect group of coaches to learn from as I continue my development and look to push on to the next level.
“I will be giving everything I have to help get this club back to where it belongs and deliver the success that our fans deserve.”
Rashford, who burst onto the scene during Louis van Gaal’s reign at United in 2016, has taken in 170 appearances for the Red Devils to date.
He has recorded 45 goals across those outings, while earning 32 caps for his country.
United is delighted to have got him tied down, with Ole Gunnar Solskjaer looking forward to seeing an exciting front man unlock further potential.
The Red Devils boss said, “Marcus is one of the most talented English players of his generation. He is an outstanding player; blessed with natural pace and energy.
“Marcus is a shining example of the talent that our academy produces and his upbringing means that he truly understands what it means to play for Manchester United.
“Despite being only 21 years old, Marcus already has great experience. He has a fantastic future ahead of him with the club and I am delighted that he has signed a new contract.”