Farrell has developed the national side into heavyweights of the game and while the recent World Cup ended in a disappointing quarter-final exit, the English dual code rugby hero has overseen significant success.
Since replacing Joe Schmidt in 2019, he has masterminded a Six Nations grand slam and triple crown, and a series victory in New Zealand, as well as steering Ireland to the summit of the global rankings.
"Coaching Ireland has been a hugely enjoyable experience and I'm proud to extend my association with the Irish Rugby Football Union," Farrell said.
"It's a pleasure to work with such a talented and committed group of players and as we enter a new cycle, it will be exciting to see more players come through the system.
"There is a talented group of established internationals who are determined to succeed at international level for Ireland and I'm excited to see how the recent Ireland U20 squads will also emerge and challenge for international honours in the near future.
"It all makes for an exciting next chapter and it is one which my family and I are delighted to continue."
Farrell is the current World Rugby coach of the year and by the time his new contract ends, he will have spent 11 years in Dublin.
"Over the course of the last four years Andy has helped drive the highest standards for the men's national team," IRFU performance director David Nucifora said.
"It's testament to the positive environment which he and his backroom team have fostered that Ireland has enjoyed such a sustained period of success in recent times."
The contract end date raises the possibility of Farrell eventually taking over from England head coach Steve Borthwick, whose deal with the Rugby Football Union also concludes after the 2027 World Cup.
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