The Gunners have not specified details on the deal, only describing it as "a new, long-term contract" on their official website.
"Laurent has been outstanding for us over the last two seasons," said Arsenal manager Arsene Wenger. "When you consider that until 2009 he was playing in Ligue 2 in France and that he is now performing at the very top level in the Premier League and for his country, the development that he has shown has been absolutely exceptional."
Koscielny has been a first-team regular virtually since his £9.7 million arrival from Lorient in 2010.
Over the past two seasons no player has started more games for the Gunners in all competitions than Koscielny's 85.
The 26-year-old has earned four caps for France, and was part of Les Bleus' squad at Euro 2012.