The 28-year-old's Munster debut came against Llanelli Scarlets in 2007, and the Academy graduate made his Heineken Cup bow against Northampton Saints in April 2010.
Holland has won 83 caps for Munster and has established himself as an important squad member, playing in both the second row and back row.
He featured in every single RaboDirect PRO12 game last season and has made ten appearances so far this season as he continues with his consistent form.
Commenting on the news, Holland said: "I'm delighted to have signed on for another two years. With such a young and exciting squad the future is bright here at Munster and I'm glad to remain involved.
"Having worked so hard to get where I am, I am keener than ever to push on and challenge for starting spots."
In further squad news, Ian Nagle has joined Aviva Premiership club Newcastle Falcons today on a three-month loan basis.
In making the move, the Buttevant man joins his former Munster colleague and fellow Academy graduate Danny Barnes who signed the with Falcons last summer.
The arrangement provides the 25-year-old lock with the opportunity to challenge for competitive first team rugby on a consistent basis.
With 29 caps for Munster, Nagle has only featured on three occasions this season, with his last outing coming against the Scarlets in December.
Munster head coach Rob Penney said: "Newcastle, who are currently struck with injuries, made contact with a request and we were happy to accommodate them with a short-term loan. Ian departs with our best wishes and we believe it will be a beneficial experience for him."