The ECB's statement came less than a day after England arrived in Perth for a tour of Australia where they will look to win a fourth successive Ashes Test series.
Former Victoria and Tasmania paceman Saker, 47, has been widely praised for his work with England's seamers since joining the national set-up in May 2010 and ECB managing director Hugh Morris was delighted to have retained his services in the face of rival offers.
"David Saker has made - and continues to make - an enormous contribution to the success of the England team," Morris said in a statement.
"Since joining us in May 2010 he has worked with - and developed -- an outstanding bowling unit which has been key to winning two successive Ashes series, winning a global event (the 2010 World Twenty20 in the Caribbean) and climbing to number one in the world."
Saker's role was particularly evident during the 2010/11 Ashes tour where England's pacemen, in contrast to some previous series, found a consistently good length on Australian pitches that helped the side to a 3-1 win.
Saker, who replaced Ottis Gibson, now head coach of the West Indies, as England's bowling guru, welcomed his contract extension by saying: "Given the calibre of players in and around the side at the moment and the hunger and commitment from all involved I am very much looking forward to another very exciting period over the next couple of years starting with the immediate challenge of retaining the Ashes."
Former England batsman Graeme Hick is a high performance coach at Cricket Australia's Centre of Excellence in Brisbane.