The new deal will keep the goalkeeper at Sunderland until 2020.
Pickford made his first-team debut earlier this month in the Fa Cup tie at Arsenal.
Sunderland boss Sam Allardyce said: “Jordan is an exceptional talent who has already demonstrated that he is comfortable playing at the highest level.
“At the tender age of just 21, which is still very young in goalkeeping terms, there is still a lot more potential for development which is really exciting for us.
“It’s always great to see a local lad progress through the Academy ranks especially for our fans, and I am certain that Jordan has a very bright future ahead of him here at Sunderland.”
