The Spaniard’s existing deal still had two years to run but he has agreed terms for an additional 12 months, the PA news agency understands.
Villa are also keen to sit down with the 52-year-old in the summer and discuss a new longer-term contract.
Emery has done an impressive job at Villa Park, guiding them from a relegation fight when taking over from Steven Gerrard in November 2022 to the brink of Champions League qualification this season.
Emery has guided Villa to the brink of Champions League qualification
They are also in the semi-final of the Europa Conference League, where they play Olympiacos, and are the favourites to win the tournament which would represent a first European trophy since 1982.
Due to his impressive work at Villa Park, he was recently linked with the vacant Bayern Munich managerial position, while a number of other top European clubs will be looking for managers this summer and might have targeted the former Sevilla, Arsenal and Paris St Germain boss.
After Emery guided them to a seventh-placed finish last season, Villa have kicked on this term and are in pole position to finish fourth and qualify for the Champions League for the first time.
They are sixth points ahead of fifth-placed Tottenham, who have two games in hand, and are managing their tough Thursday-Sunday schedule well.
Villa play Chelsea on Saturday night, where they could move nine points clear of Spurs, who play Arsenal on Sunday.
The club statement:
The Spaniard has transformed the club since his appointment in October 2022 and immediately guided Villa to a seventh-place finish in the Premier League having occupied 17th position at the time of his arrival.
The 52-year-old therefore led the club to European qualification for the first time since 2010 and has continued to build on that platform in his first full season at the helm.
The club are currently on pace to qualify for next season’s UEFA Champions League while Emery’s wealth of experience on the continental stage has also guided us to a first European semi-final in 42 years.
Emery said: “We are enjoying our way together with Villa fans, the club owners, management and this great group of players that we are proud of.
“Me and the football management… we share the vision of the owners. Nassef [Sawiris] and Wes [Edens] are very supportive and respectful, and we have a good environment and the right structure to develop this football club.
“We must maintain the hard-working spirit, clever decisions and coordination with the ownership that we have found during this time. We will work to get better and better. And we will demand from each other. Ambition already is, and must always be, the motto of this project.”
Chairman Nassef Sawiris said: “We are thrilled and are building a sporting operation around Unai to support him with a view of returning Aston Villa, a co-founder of the English Football League as we prepare to celebrate our 150th anniversary, to its historic levels of greatness.”
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