The 54-year-old Canadian, starting his 11th season as Colorado's coach, was entering the last year of a three-year contract signed in 2023.
"I'm extremely happy and grateful to continue leading this group," Bednar said. "I look forward to working hard each day this season and beyond to accomplish our goal of winning another Stanley Cup."
The new deal was announced hours before the Avalanche open the 2026-27 season at home against Los Angeles.
"Jared has done an outstanding job over the last decade and there’s no doubt in my mind he's the best coach for this group," Avalanche president of hockey operations Joe Sakic said. "He commands the room and has complete confidence of the players."
Bednar, the team's all-time wins leader with a record of 445-262 with 75 overtime losses, is the NHL's second-longest tenured coach behind Tampa Bay's Jon Cooper.
Colorado reached the playoffs for the past nine seasons and last year had the NHL's best regular-season record with 55 wins but lost to Vegas in the Western Conference final.
