Terms of the deal were not revealed.
Julien became Montreal's coach in January of 2003, his first head coaching job in the NHL. The Canadiens had 41-30-7-4 record this past season and reached the playoff semifinals where they lost to eventual Stanley Cup champion Tampa Bay.
"The Canadiens' organization is extremely proud of the work accomplished by Claude Julien last season," General Manager Bob Gainey said. "The team posted its best record of the past 10 years, which is the result of the players' commitment, combined
to a system very well established by the coaching staff.
"Claude has brought an excellent work ethic to the organization and we are confident that his presence will allow our team to improve for years to come."