The Brazilian enjoyed an impressive season in regards to his individual performances last term, despite the Blues' disappointing collective campaign, and has been rewarded for his displays.
Willian, who has scored 19 goals in 140 Chelsea appearances to date, is delighted to have committed his future to the west Londoners.
The attacking midfielder is targeting more silverware having been part of the side that won the Premier League title and Capital One Cup under Jose Mourinho two years ago.
Standard Sport understands Mourinho expressed an interest in signing Willian earlier this summer, but the new deal appears to put any possibility of the pair reuniting at Manchester United to bed.
"I’m very happy to sign a new contract with Chelsea," the 27-year-old told the club's official website.
"It’s a dream to continue with this club and over the next four years I will try to help the team win more trophies.
"It’s been an amazing time for me since I joined the club three years ago, I’ve won titles and last season I was named Chelsea Player of the Year.
"I hope to be able to stay at that level during the coming seasons and achieve more success," he added.
Chelsea 2016/17 pre-season fixtures
Technical director Michael Emenalo has praised the importance of Willian as the club begins a new era under manager Antonio Conte next season.
"We are very pleased to agree a new long-term deal with Willian, who has proved himself to be an important player for the team since he arrived here.
Chelsea 2015/16 Player Ratings
"We are looking forward to seeing his continued impact as we begin an exciting new campaign under first-team head coach Antonio Conte."
Willian joined Chelsea in the summer of 2013 and has established himself as an integral member of the side. Only Cesc Fabregas and Cesar Azpilicueta (both 37) made more Premier League appearances than the South American (35) last term.
