McDermott's new deal is a six-year pact that will run through the 2025 season, sources told ESPN's Adam Schefter.
"Sean's leadership on and off the field has been nothing but genuine and transparent, qualities we appreciate as owners," Bills co-owner Kim Pegula said in a statement. "He is the same great person to us, the players and everyone across all our organizations ... Sean's attention to detail was apparent back then and his process driven approach has brought great stability to our organization. We are happy to extend his contract and keep him in Western New York for many years to come."
The Bills hired McDermott in 2017 with the team mired in a 17-season playoff drought. The former Carolina Panthers defensive coordinator then led Buffalo to the postseason in his first year at the helm.
Buffalo has enjoyed two playoff berths in three seasons under McDermott. It's posted a 25-23 regular-season record over that span, including a 10-6 mark in 2019, which was the Bills' best campaign since 1999.