The new deal means Cooper, who has been in scintillating form as the Reds have surged to the top of the Super Rugby ladder, will remain in Australia until the end of the 2012 season at least.
Cooper said: "It's an exciting time to be part of Australian Rugby with the Reds going so well and the World Cup coming up, so I'm glad everything is now squared away.
"The vibe within the Reds team and the support we're getting from our fans is incredible and I'm proud to be part of it going forward."
Cooper, who was last year's 2010 Australian Super Rugby Player of the Year, has continued his form into this year and is currently the competition's leading point-scorer.
Reds coach Ewen McKenzie is delighted to have his star number 10 tied up for another year.
"Everyone notices the freakish aspects of Quade's game but all those highlight moments start from the hard work he puts in off the field," McKenzie said.
"No-one works harder than Quade and his rise in world rugby hasn't come by accident.
"Our playing group is building nicely for next year and beyond, and Quade is just one of many excitement announcements we plan on making in due course."
Cooper is the 17th player to re-sign with ARU this year ahead of the upcoming Tri Nations and Rugby World Cup tournaments.
"I'm delighted we've extended Quade's tenure in rugby beyond this year's Rugby World Cup because I believe there are some wonderful times ahead for him and this young Wallabies team," ARU chief executive John O'Neill said.
"Quade and his halves partner Will Genia have become superb and consistent contributors to the Reds and the Wallabies and it's hard to imagine a better double act in world rugby.
"Quade delivers an X-Factor, that is undeniable."
"He has that rare ability to excite an audience and have a defence on alert every time he touches the ball."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
$29.99
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.
