Wedge has directed Cleveland to a 54-38 mark this season in his fifth year as the Indians' manager. The Indians are one game behind the Detroit Tigers in the American League Central.
"Eric has clearly defined his leadership and vision during his tenure as manager of the Cleveland Indians," said Indians General Manager Mark Shapiro. "Through his relentless work ethic and strong belief in our players, Eric has led our major league team to one of the best records in baseball two of the past three seasons.
"I am confident that Eric is the right man to guide our team as we collectively pursue our ultimate goal of sustainable championship success."
Wedge has a 373-367 record since becoming the Indians' manager prior to the 2003 season. His managerial wins are the seventh most in the 107-year history of the franchise.