Details were not disclosed, but the Boston Herald reported the deal runs through the 2012-13 season.
Julien, 50, is entering his third season as the Bruins' coach.
Last season, he guided the Bruins to a 53-19-10 record and the semifinals of the Eastern Conference in the Stanley Cup playoffs.
He won the Jack Adams Award, symbolic of the league's top coach, the third coach in franchise history to earn the honor.
"Claude has shown a tremendous propensity to get the maximum results out of our team," General Manager Peter Chiarelli said at a news conference.
The Bruins scored an Eastern Conference-leading 116 points in the regular season and were the top seed in the East before losing to Carolina in the conference semifinals, their longest playoff run since 1999.