The New Zealander, who will name his squad for the World Cup on Thursday, took charge of the Wallabies on a four-year contract in 2008 and has since built a young side now ranked second in the world.
Deans' decision to stay put also ends speculation that he will succeed Graham Henry as All Blacks coach after the upcoming World Cup.
"A large number of players have re-committed to Australian rugby this year, I'm pleased to be joining them," Deans said in a press release.
"My priority remains, as it has always been, on the preparations both for the final (Tri Nations) test against the All Blacks in Brisbane, and then for the rugby World Cup that follows in New Zealand."
Deans returns to Australia with his team on Wednesday from South Africa, where the Wallabies beat the Springboks 14-9 last weekend. Their final Tri-Nations Test is against New Zealand on August 27.
A former international with five caps at full-back for the All Blacks in the 1980s, Deans went on to establish himself as a coach at the Canterbury Crusaders, who he led to five of their seven Super rugby titles.
Since taking charge of the Wallabies he has brought through the likes of James O'Connor, Will Genia, Quade Cooper, Kurtley Beale and David Pocock.
Following impressive results like their last gasp win over New Zealand in Hong Kong and the 59-16 thrashing of France in Paris last year, some have predicted a new golden era for Australian rugby.
Australia did suffer 10 successive defeats to the All Blacks prior to the win in Hong Kong last October, however, and also lost to Samoa at the start of the current season. But there is optimism about the way the team has been developing under Deans.
"There is no doubt Robbie has earmarked and brought through a new generation of Wallabies stars and we have certainly not stood still over the three and a half years he has been in charge of the national team," ARU Chief Executive John O'Neill said.
"I look forward to him making an even more lasting impression on Australian Rugby over the next two seasons."
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