Marquez indicated in the lead up to this weekend's Catalan Grand Prix that he was close to securing an extension with the marque that has guided him to two MotoGP world championships.
The new deal will see Honda field an unchanged rider line up for the next two seasons after Dani Pedrosa put pen to paper on a new two-year deal last month.
The 23-year-old has won 26 grands prix since stepping up to the premier class with Honda in 2013. He won the world title at his first attempt before following up the success in 2014.
“”I'm very happy to announce this renewal with HRC, especially coinciding with Grand Prix of Catalunya, my home GP, where I have some really good memories,” said Marquez, who is second in the championship standings.
“HRC and I have a very strong relationship, and I've always wanted to continue being a part of the Repsol Honda Team.
“In three and a half years together, we've enjoyed some unbelievable moments, with great victories and two world titles, as well as a few challenging moments that I believe are making us stronger.
“We're working very hard this year to regain the title. It's a great honour to be a part of the Honda family, and I'm glad to remain with this special group of people for another two seasons.”
Honda boss Shuhei Nakamoto believes Marquez has grown to become a more complete rider since joining the operation.
“We're honoured to have reached an agreement with Marc for two more years,” said Nakamoto.
“There's no doubt that he is the present and future of MotoGP.
“We know him well and he knows us well, and we both wanted to continue together; for this reason, we felt no rush for this renewal.
“Marc has grown a lot during almost four years with HRC, and now he's an even more complete rider than in 2014, when he won 10 races in a row.
“Although he's still very young, we already have a long relationship together, and we know that Marc's experience is very important for helping our engineers to develop our bike.”
Opening practice for the Catalan Grand Prix is scheduled to begin later today.