Valencia has established himself as Jose Mourinho's first-choice right-back and has now been rewarded with an extended stay at United.
The 31-year-old is a key figure at Old Trafford, making 271 appearances, scoring 21 goals and winning six trophies since signing from Wigan in 2009.
A statement from the club read: "Manchester United have confirmed a clause has been triggered to extend Antonio Valencia's contract by one year, keeping the experienced Ecuadorian at Old Trafford until at least June 2018."
Valencia has made 23 appearances for United this term under Mourinho, who attempted to take him to Real Madrid during his time in Spain.
"I tried to sign Antonio a number of years ago, when I was at Madrid," Mourinho told MUTV earlier this season.
"Even though he was not playing right-back at the time, I thought he could be phenomenal in that position.
"As it was, United told me 'no chance!'. I am not surprised by his form this season."
"Another year to give everything for the greatest club in the world @ManUtd. Happy to announce I've renew my contract 'til 2018," Valencia wrote on Twitter.