Terms of the deal weren't announced, but the Milwaukee Journal Sentinel reported Williams will receive more than $2 million annually.
Williams guided the Golden Eagles into the NCAA Tournament's Sweet 16 for the first time since 2003 after compiling a 22-15 record this season.
He boasts a 69-37 record in three seasons at the helm and is 32-22 within the Big East Conference.
"The new agreement is an acknowledgement of Buzz's standing as one of the rising stars in collegiate coaching," Marquette Athletic Director Steve Cottingham said.
"Too much attention is given to my position, but I assure you, it's the collective ownership of all of those who impact our program daily, who have developed the culture we currently have," Williams said.
Swim Week Miami Beach 2014 [PHOTOS]