According to reports the strikes agreed to a deal worth £300,000 per week. United have now announced he will stay at Old Trafford and will become a club ambassador when he retires.
"I am made up to be staying at United," Rooney told the club's official website.
"In August I will have been at the club for 10 years and during that time I have played with some fantastic players and won everything that I hoped I would when I first signed. I now have the chance as one of the club's senior players to help the younger players coming through and to be a part of another great United team.
"The fans have always been a huge part of this club and the support they have given me since my debut against Fenerbahce has been amazing. I am very grateful to all United fans around the world for their continued support.
"I am really excited to be a part of the club's future and want to thank David Moyes and Ed Woodward for their belief and support in me. I am convinced that this is the start of another successful chapter in Manchester United's history."
Chelsea had two bids for Rooney rejected last summer but United, in particular manager David Moyes and new executive vice-chairman Ed Woodward, were adamant that he would not be allowed to leave.
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