The former Manchester United and England player would have been out of contract in July and was included on a list of free agents recently released by the Premier League.
Black Cats head coach Dick Advocaat has moved to ensure Brown will extend his stay on Wearside beyond his 36th birthday, however.
Brown has made more than 80 appearances for the Black Cats since moving to the Stadium of Light in 2011, with his new deal the Dutch manager's first big move after agreeing to remain in the North East.
Advocaat succeeded Gus Poyet as Sunderland boss in March on a deal to run until the end of the season.
After guiding the Wearside club to Premier League safety, the former Holland manager opted to leave, only to reverse that decision last week.
Source : PA
Source: PA