"This Munster team has shown it has what it takes to compete with the best in Europe and I look forward to playing my role in bringing further success to both Munster and Ireland."
Earls made his senior debut for Munster against the Ospreys in April 2007. The Munster Rugby Academy graduate has made 91 appearances for Munster to date, scoring 26 tries.
He made his Ireland debut in the 55-0 win over Canada in Thomond Park in November 2008.
The 26-year-old has won 39 caps for Ireland scoring 12 tries. Earls was Ireland's top try scorer at the 2011 Rugby World Cup tries and he toured with the Lions in 2009.
The versatile back's last appearance for Ireland was in the final game of last year's Six Nations against Italy.
IRFU Chief Executive Philip Browne said: "Keith is a proven finisher and has shown guile and determination throughout his rugby career for both Munster and Ireland.
"We wish him a speedy recovery from his recent injury and look forward to seeing Keith play for Munster and Ireland over the next two years."
Munster head coach Rob Penney added: "We are delighted that Keith has signed a new IRFU contract which will see him remain a Munster player until the end of the 2016 season.
"Keith is an exciting player whose speed and acceleration can cause havoc for opposition defences. As a senior member of the squad, he will play a huge role in the future success of the province."