A KU announcement Wednesday said Self would be paid $3 million per year.
Self's contract replaces his prior agreement, which would have expired in March 2011.
"We are thrilled that Bill will be our coach for years to come," KU Athletic Director Lew Perkins said. "Bill's done a tremendous job leading the Kansas men's basketball program both on and off the court."
Self has coached at Kansas for five years, building a record of 142-32.
. "I have said many times that I cannot imagine a better place to play, or to coach than the University of Kansas," Self said. "My family and I look forward to being part of the Kansas and Lawrence communities for many years to come."
The Jayhawks have won at least a share of the last four Big 12 regular-season titles and three straight conference tournaments.