Having only started five league games before this campaign, he has played 16 times in all competitions this season, establishing himself as one of the most important members of the Ulster squad.
His excellent form for Ulster has seen him break through into the Ireland side. He scored a try against Fiji in the GUINNESS Series at Thomond Park and he won three caps in the RBS 6 Nations, making his full debut against Scotland at Murrayfield.
Marshall has also represented Ireland at Under-20 level and is a graduate of the Hughes Insurance Ulster Academy.
His season was cut short after he suffered three concussions in three games and he will miss Ireland's tour of North America in the summer.
Commenting on the signing, Ulster's director of rugby David Humphreys said: "I am extremely pleased that Luke has committed to Ulster for another three years. He is an excellent young player and he has been superb for us this season.
"Luke is a prime example of what we are trying to achieve here - he is from Ulster, he has come through our Academy system, he has received excellent coaching and through his dedication and hard work he has gone on to excel at provincial and international level."
Marshall admitted: "I am delighted to staying with Ulster. I have really enjoyed my rugby this season and I am looking forward to August already and to getting back out onto the pitch.
"We have a fantastic squad here at Ulster and I am pleased that I will be part of it for the next three years."