The Barclays Premier League club announced the news on their official website after the 36-year-old had been in talks with Swansea since the end of last season.
"As a club we are pleased to agree the new contract with Garry," Swansea chairman Huw Jenkins said.
Monk, who had two years left on his original deal, guided Swansea to a best Premier League finish of eighth in his first full season in charge last term with a record points total.
The 36-year-old - the youngest manager in the Premier League - joined Swansea as a player in 2004 and went on to make 270 appearances, becoming captain and playing his part in the club's rise through the divisions and Capital One Cup success in 2013
Monk succeeded Michael Laudrup as Swansea manager in February 2014 and Jenkins said the new contract, which Press Association Sport understands includes a significantly increased release clause, is fully deserved.
"It's deserved reward for the fantastic season we've just had and all Garry's hard work, commitment and loyalty to our football club over many years," Jenkins said
"We also feel it is vital to have stability within our football club, especially with Garry going into such a big season where the reward for remaining within the Barclays Premier League is going to be greater than ever in terms of finance and global exposure."
Source : PA
Source: PA