Hurdle -- who has guided the Pirates to a 151-173 record since taking over the team after the 2010 season -- was working on a three-year deal that was due to expire at the end of the 2013 season.
The team posted 72 wins in 2011 and 79 wins last season, following a 57-105 season in 2010 under John Russell.
The Pirates were in first place in the National League Central Division July 18 last year but closed out the season 9-23 to log their 20th consecutive losing season.
"Clint's leadership, infectious positive energy, passion and knowledge transcend the clubhouse and we believe he is the right man to help us return championship caliber baseball to Pittsburgh," Pirates General Manager Neal Huntington said in a statement.
"I feel privileged to have the opportunity to continue and finish what we started," said Hurdle, 55, who previously managed the Colorado Rockies for eight seasons -- winning the NL pennant in 2007.
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