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Danny Welbeck scored nine Premier League goals for Manchester United last season
Welbeck, 21, had stalled over signing a new contract at the club, with protracted talks having taken place over the past few months.
The England striker has seen his chances of regular football limited by the recent arrival of Robin van Persie, but has committed to a further four years at the club - much to the delight of manager Sir Alex Ferguson.
"Danny has been with the club since he was eight years old and has made fantastic progress in the last couple of years first out on loan and last year as a regular in the first team," Ferguson told the club's official website.
"He has become an important player at international level as well, as the maturity of his performances at the European Championships showed. This year is another important one for him. He has a bright future ahead of him."
Welbeck added: "Playing for United is all I've ever wanted to do - it's the club I've supported all my life. I can't wait for the challenge of the new season to play my part in helping the team compete for trophies.
"I'm learning all the time from the best manager in the game and I'm keen for that to continue alongside the world class players in the squad."
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