The new deal was announced by Magpie president Eddie McGuire at the club's season launch event on Monday evening.
Buckley took over the coaching job at the Westpac Centre in 2012 after spending two-years as an assistant coach under Mick Malthouse, and has lead his team to wins in 65 per cent of games played over the two years of his tenure.
A Magpie hero thanks to his outstanding playing record for the club between 1994 and 2007, Buckley said he was delighted to have put to rest any speculation about his future.
"I’m honoured by the faith shown in me by the board. It’s a privilege to coach Collingwood,” he said.
“What is important now is that we continue to work hard together and continue to build, with a new young group, something enduring to add to the rich history of this club."
McGuire said the decision to offer Buckley a contract extension was brought about by the optimism surrounding the club, despite an early exit from the 2013 finals series at the hands of Port Adelaide.
“The secrets of success are continuity and drive and this decision is not only a show of faith in Nathan but a demonstration of our commitment to having both,” McGuire said.
“Collingwood right now is a wonderfully vibrant and positive place to be and this gives us three clean years."
Buckley, 41, has coached Collingwood in 48 matches for 31 wins and oversaw the departure of Magpie stars Darren Jolly, Alan Didak (both retired), Heath Shaw (traded to GWS) and Dale Thomas (free agency move to Carlton) at the end of the 2013 season.
The Magpies lost both their 2014 NAB Challenge games but rebounded with a practice match win over Gold Coast on Sunday,
Collingwood plays Fremantle at Etihad Stadium on March 14 in the opening match of the 2014 premiership season.