The England left-back had been linked with a move away from Goodison Park, with Manchester United seeing a bid for Baines turned down last summer.
But he has committed his future to Everton to boost manager Roberto Martinez's chances of securing silverware and a Champions League place for his side.
"It would be an understatement to say we are delighted to secure the best footballing years of Leighton Baines at our club," Martinez told Everton's official website.
"It's a massive boost and exciting for the future.
"Leighton has just turned 29 and brings the right measure of maturity and football knowledge in a very specialised position on the pitch, bringing an infectious and positive influence to the rest of the squad.
"I know that every fan will be delighted with the news and we all share that excitement looking at what's left of this campaign and beyond.
"With the crucial games we have ahead, it is going to be vitally important to have Leighton's experience there to help us fight for our aims."
Cant we all get along! Do United fans have to rise to every comment on here like the Everton fans say, give and take boys- ScRipt69