After months of speculation over his future, the 34-year-old had dropped a hint on Wednesday night following the club's 2-1 Europa League final success against Benfica that a new deal was imminent.
And fans did not have to wait long to find out the club's all-time record goalscorer will be staying on for a 13th season at Stamford Bridge.
"I'm absolutely delighted. Everybody knows I always maintained the dream was to stay at Chelsea," he told chelseafc.com.
"We've been talking for ages and even though it went on for quite a period it was always amicable.
"I want to thank (Chelsea owner) Mr (Roman) Abramovich for everything he's done in making the dream a reality.
"I love this club, the staff, the players and especially the supporters, who have treated me fantastically since the day I arrived.
"The thought of helping the club to more success in the forthcoming years is all I ever wanted. I couldn't be happier."
The news rounded off an incredible week for Lampard who on Saturday broke Bobby Tambling's 43-year-old Chelsea scoring record when his double at Aston Villa took him to 203 club goals.
That was followed by captaining Chelsea to Europa League glory in Amsterdam in John Terry's absence, and now a new contract to boot.
Following the Europa League success Lampard had suggested he'd be extending his deal.
"I really, really hope to be around next year," he had told ITV.
Lampard joined from West Ham in 2001 for £11 million ($16.5 million) and has gone on to win the Champions League, three league titles, four FA Cups and two League Cups before adding Wednesday's triumph.
Since moving across London he also established himself as an England regular, earning 95 caps, and he was the Football Writers' Player of the Year in 2005.
Frank Lampard signs one-year extension with Chelsea
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