Ivanovic will remain at Stamford Bridge until the summer of 2016 after agreeing the new deal. The Serbian, who can play at right-back or centre-half, has made 99 appearances for the Blues since arriving from Lokomotiv Moscow in 2008.
There is increased competition places in Carlo Ancelotti's backline after the ?£25million arrival of David Luiz, but Ivanovic's new deal bodes well for his future.
"It is good news for me, it is a very big step for me in my career and I want to give my maximum and try to help Chelsea win a lot more trophies," he told the club's official website.
"These things take a little time but my first vision was always to stay with Chelsea. There were not a lot of problems because I wanted to stay, the club wanted me to stay and I want to thank everyone who helped with the deal, I am very happy with that."
Ivanovic shifted from centre-back to the right of defence to accommodate Luiz as a second-half substitute in the 1-0 defeat by Liverpool last week, but it is another match against the Reds that represents his finest moment in a Chelsea shirt.
He scored twice in their 2008/09 Champions League quarter-final first-leg, a day which provided the catalyst for his extended first-team run.
"I don't like to think too much about the past because in football you have to get better every day, concentrate on small details of every game, but from my side maybe the two goals against Liverpool gave me confidence," he said.
"For every player coming to a new country you have to adapt and then you become better and better, but I now feel so comfortable here and I really enjoy being a Chelsea player.
"Now I think I can give many more good games. The three years have gone very quickly and I think it has been a success so I hope to carry on getting better and better with Chelsea."
Source: PA
Source: PA