The 63-year-old former Chelsea, Juventus and Napoli boss agreed a two-year extension to the deal he signed in June last year after Simone Inzaghi left for Inter Milan.
“Coach Maurizio Sarri has renewed the contract with the club extending the expiry of the agreement until 2025,” the club said in a statement.
Sarri guided Lazio to a fifth-place finish in his first season at the Stadio Olimpico to qualify for the Europa League.
The veteran coach reportedly obtained the guarantees he requested to be more involved in the club’s recruitment policy, according to Italian media.
Sarri became famed for his ‘Sarriball’ at Napoli from 2015-18. He joined Chelsea where he spent one season, winning the Europa League, his first trophy as a coach, before moving to Juventus in 2019.
In Turin he won Serie A, but was fired after one season in charge.
Sarri is a charismatic and colourful coach who has worked his way up from the Italian lower divisions, starting on the benches of tiny Tuscan clubs while retaining his day job as a banker.