"Mark Carney, Governor of the Bank of England will remain in his role until 31 January 2020, Chancellor Philip Hammond announced today (11 September 2018)," the statement read.
The extension of Carney's term was agreed in an exchange of letters between him and Hammond.
In his letter to the chancellor, Carney noted the importance of doing everything possible to ensure the smooth UK withdrawal from the European Union and outlined his commitment "to do whatever I can in order to promote both a successful Brexit and an effective transition at the Bank of England."
Carney's term was set to finish in July 2019.
"I’m delighted that the Governor has agreed to stay in his role for a further seven months to support a smooth exit from the European Union and provide vital stability for our economy," Hammond said in the statement.
In addition, Jon Cunliffe, the Bank of England's deputy governor with responsibility for financial stability, was re-appointed on Tuesday. His term will last until October 2023.
In August, Carney said that the risk of leaving the European Union without a deal was "uncomfortably high" for the United Kingdom.