The Gabon international had been linked with a potential move to Premier League side Arsenal earlier in July but the two-year extension - with a salary upgrade - should end immediate speculation about his future.
"I'm absolutely delighted that the coming years of my career will be spent at Borussia Dortmund," Aubameyang told BVB's official website.
"I feel extremely comfortable at this club, playing with my team-mates and residing in this city. Dortmund has become a second home for me. I am committed to the club with all my heart and never considered departing."
Dortmund broke the news on their website only to take it down swiftly afterwards, causing some confusion about whether it had been prematurely announced, but a few minutes later it was back on their official site.
BVB sporting director Michael Zorc praised the 26-year-old's progress since joining from Saint-Etienne in 2013 for €13 million, with Aubameyang scoring 25 goals in 46 appearances last season.
"Aubameyang has developed outstandingly," Zorc said. "We're delighted that we've been able to tie him to another long-term contract."
The African forward played all 90 minutes in Thomas Tuchel's first competitive game as Dortmund coach on Thursday as Jonas Hofmann's goal saw them defeat Austrian opposition Wolfsberger 1-0 in their Europa League qualification tie first leg.
