Speaking ahead of the return of Formula 1 from its summer break, team boss Guenther Steiner had identified Esteban Ocon, who would imminently be announced as a Renault driver, and the man who he will replace, Nico Hulkenberg, as other candidates for the driver.
Haas has now opted to keep its own French driver, with Steiner citing continuity as a key factor given the struggles which have beset the squad this season.
“Experience, and the need for it, has been one of the cornerstones of Haas F1 Team, and with Romain Grosjean and Kevin Magnussen racing for the team in 2020, we continue to have a driver line-up that offers us a solid platform to continue our growth,” said Steiner.
“Their understanding of how we work as a team, and our knowledge of what they can deliver behind the wheel, gives us a valued continuity and a strong foundation to keep building our team around.
“It's been a tough year for us in 2019 with the fluctuation in performance of the VF-19, but our ability to tap into our combined experiences will help us learn, improve, and move forward as a unit in 2020.”
Grosjean himself said: “I've always stated that it was my desire to remain with Haas F1 Team and keep building on the team's accomplishments.
“Having been here since the very beginning and seen the work both Gene Haas (founder) and Guenther Steiner put into the team to make it competitive, I'm naturally very happy to continue to be a part of that.
“To finish fifth in the constructors' championship last season in only the team's third year of competing was something very special.
“We've had our challenges this season, but we'll use both the experience of last year and this year to move forward into 2020.
“I'm looking forward to working with Kevin (Magnussen) and the whole team and continuing our journey together.”
Grosjean's new deal means that Haas will take the same driver pairing into a fourth straight season.
Haas is currently second-last in the constructors' championship ahead of this weekend's Singapore Grand Prix.