The Tigers, who led the AL Central by four games heading into Monday's games, also extended the contracts of General Manager Dave Dombrowski and assistant GM Al Avila. Monetary aspects of the deals weren't released.
Leyland is in his sixth season as Detroit's manager, building a 485-442 record and having advanced to the World Series in 2006. He previously managed the Pittsburgh Pirates, Florida Marlins, where he won the World Series in 1997, and Colorado Rockies. His managerial record over 20 seasons is 1,554-1,570.
"We're delighted Jim will continue as Tigers manager through the 2012 season," Dombrowski said. "He has led the Tigers to a World Series, and guided a contending team on a consistent basis during his tenure as manager. Jim's managerial record and accomplishments speak for themselves."
Dombrowski is in his 10th season with the Tigers. He worked with Leyland at Florida, including during the World Series season.