Terms of the deal weren't announced but Nets President Rod Thorn said it would keep Frank with the Nets "for the foreseeable future."
The Nets are 157-129 since Frank, who at 36 is the youngest head coach in the NBA, became their coach on June 21, 2004, after spending about half a season as an interim head coach. He started his NBA coaching career with 13 consecutive wins, a league record. The Nets have qualified for the playoffs after each of Frank's seasons with the team.
He is the 18th coach in franchise history, which began in 1967-68 in the ABA.
"I am truly fortunate for the support from this first-class organization," Frank said. "I would also like to express my appreciation to our coaching staff and players for their effort, sacrifice and dedication over the past 3 1/2 seasons.
"I look forward to continuing and improving upon the winning tradition of Nets basketball."