The 23-year-old, who has been in fine form for Brighton this season, will remain with the club until the summer of 2017.
Manager Gus Poyet told the club's official website: "We are absolutely delighted to have agreed this new deal with Will. He has been our match-winner many times, and has been one of our key players since he arrived.
"He has earned this new deal with his performances on the pitch. I'm pleased he is settled and so happy here. It is great for us that he has committed his long-term future to the club."
Brighton paid £1 million to Watford in June 2011 for Buckley, who has made 53 appearances, scoring 13 goals.
Buckley said: "I'm delighted. The club and Gus decided to offer me a new contract a few weeks ago and we got it sorted pretty quickly. I'm happy and that's why I've signed another contract here.
"It didn't take long for me to think about. As soon as they spoke to me about it I just wanted to get it sorted so my agent and I discussed it briefly and we completed it very quickly. I just can't wait to get back out there on the pitch again now."
Buckley is set to miss Saturday's FA Cup meeting with Newcastle due to a hamstring problem.
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