The 21-year-old England forward is now committed to the Old Trafford outfit until 2023 with the option of a further year.
The news, announced by the club on Monday, continues United’s positive summer after the recent signings of Daniel James and Aaron Wan-Bissaka.
Wythenshawe-born Rashford emerged as manager Old Gunnar Solskjaer’s first-choice striker in the closing weeks of last season.
His previous deal was due to expire next year and, with other clubs including Barcelona reportedly interested, United were keen to tie up a new deal for their academy graduate.
The new agreement reportedly puts Rashford, who has made 170 United appearances since breaking into the first team in 2016, among the top earners at the club.
Rashford told the club’s website: “Manchester United has been everything in my life since I arrived here at the age of seven.
“This club has shaped me, both as a player and as a person, so it is such a privilege every time I get the opportunity to wear the shirt.
“I want to thank Ole and his staff for everything they have done for me, they are the perfect group of coaches to learn from as I continue my development and look to push on to the next level.
“I will be giving everything I have to help get this club back to where it belongs and deliver the success that our fans deserve.”
Rashford is seen as a key figure as United rebuild for the future under Solskjaer after last season’s frustrating sixth-placed finish in the Premier League.
Solskjaer said: “Marcus is one of the most talented English players of his generation. He is an outstanding player; blessed with natural pace and energy.
“Marcus is a shining example of the talent that our academy produces and his upbringing means that he truly understands what it means to play for Manchester United.
“Despite being only 21-years-old, Marcus already has great experience. He has a fantastic future ahead of him with the club and I am delighted that he has signed a new contract.”
Wayne Rooney learnt more about football in two years under Louis van Gaal than he did from a decade winning trophies with Sir Alex Ferguson – so says the man himself.
Manchester United‘s record goal-scorer was at the back-end of his career in England when Van Gaal was appointed at Old Trafford in 2014, having lost much of the pace and energy that made him such a menacing player in his 20s.
However, for the 33-year-old – who now plays for DC United in the MLS – it was a crash course for his planned ventures into management.
“Van Gaal is by far the best coach I have worked with – 100 per cent,” Rooney told the Daily Mirror.
“His tactical skills, his way of preparing and his attention to the finest of details, I found amazing. I admired that in him. I had never looked at stuff like that before.”
It was of course not all rosy for Rooney at United with Van Gaal, who was ignominiously sacked shortly after winning the FA Cup in 2016.
His rigid methods and United’s often ponderous play during his tenure drew criticism from fans and pundits alike – though it didn’t put Rooney off learning numerous lessons from the Dutchman.
“Van Gaal knows that the way he works is tough for players. I made him aware of that at the time and we talked about this very well together,” he added.
“I regret how it all ended, yet I know one thing for sure – I have learnt a lot from him and I am definitely going to use those lessons for when I am a manager.”
Manchester United completed the big-money signing of Crystal Palace full-back Aaron Wan-Bissaka on Saturday as the 21-year-old swaps Selhurst Park for Old Trafford for an initial fee understood to be £45million, with another £5million possible in add-ons.
Wan-Bissaka becomes the most expensive uncapped British player of all-time and has signed a five-year deal at United, with the option of a further year.
United manager Ole Gunnar Solskjaer said: “Aaron is one of the best upcoming defenders in the Premier League.
“He has the right work ethic, talent and mentality to play for Manchester United and he fits exactly the type of player that we are looking to bring into the squad to help us improve and push on further.
“Aaron is a young, hungry player and eager to learn and that’s important at his age. I am delighted he has signed with us and we look forward to continuing his tremendous development so far.”
Wan-Bissaka, who made 46 appearances in all competitions for the Eagles, becomes Solskjaer’s second signing following the arrival of Swansea’s Daniel James earlier in the month.
And he also becomes the fifth most expensive defender ever in the Premier League.
Check out the video above to see who else makes the top five