The 25-year-old Irish-qualified back has since become a regular in the Ulster team this season, making 20 appearances for the province to date and scoring three tries.
D'Arcy, whose grandfather hails from Tipperary, was playing club rugby for Manly in Sydney when he was invited to Belfast for a trial last summer.
Since then, he has impressed the coaching staff with his ability to counter attack and his excellent positioning in defence.
"I'm very grateful to Ulster for giving me a chance on a one-year contract this year. I've enjoyed my time here so far and think I've learned a lot and experienced a lot. I'm really looking forward to the next two years," said D'Arcy.
"We've shown this year that there's a lot this team can do and we're heading in the right direction and I want to be a part of that.
"It took me a little while to settle once I arrived and find my feet, but since I've had the chance to start and cement my place in the team I've really enjoyed playing for Ulster and with guys like Andrew Trimble and Rory Best who are international calibre players.
"The coaching staff have really helped me improve my game and I feel that with the staff and this group of players I can go further and we can go further as a team."
Ulster's operations director David Humphreys said: "We brought in Adam last summer as an unknown prospect but he has certainly proved himself this season and has become an important member of our team.
"If we want to compete at the highest level we need depth and quality in our squad and we feel that Adam adds just that to our line-up."
Meanwhile, fellow full-back Jamie Smith has agreed to join the Newport Gwent Dragons in the summer. The 22-year-old has made 16 senior appearances for Ulster since his breakthrough in 2009 and all at Ravenhill wish him well for his move to Wales.