The Shanghai International Circuit hosted its first F1 race 20 years ago and China is seen as a major part of the sport's efforts to increase its fanbase.
The Chinese GP will be the second round on the 2025 calendar, taking place on March 21st-23rd.
The sport returned to China this year for the first time in five years following the pandemic, with Max Verstappen winning the sprint and the main event.
"Shanghai is an incredible city and the racetrack is a wonderful test for our drivers," Stefano Domenicali, president and CEO of Formula 1, said.
"So I am delighted that Formula 1 will continue its successful partnership with the Chinese Grand Prix for a further five years."
Zhou Guanyu, a Shanghai native and China's first F1 driver, was a major draw during the race weekend in April but he will be leaving the Sauber team at the end of the season.