Mourinho, 52, returned to Chelsea in 2013 on a four-year contract and this season has led the club to the Premier League title — their first since 2010 — and the League Cup.
During his first spell at Stamford Bridge, between 2004 and 2007, he won two league titles, in 2005 and 2006, as well as two League Cups and one FA Cup.
Mourinho is already the best-paid manager in England, with a reported annual salary of £8.4 million ($12.75 million, 11.4 million euros), and British tabloid The Sun reported that his new deal would be worth around £10.5 million per year.
Speaking after Chelsea secured the league title with a 1-0 win over Crystal Palace on Sunday, Mourinho reiterated that he will stay at the club as long as owner Roman Abramovich wants him to remain.
“As I was saying since the beginning of the season, I stay here until Mr Abramovich wants me to stay,” said the Portuguese. “The day he tells me to go, I go.”