The news that O'Connell, who has played for the club his entire career and won 88 caps for Ireland, has committed himself to the club will be very well received.
And the 34-year-old, who captained the British & Irish Lions on their 2009 tour to South Africa, is pleased to have secured his future at Munster.
"Over the years I have been privileged to play in many fantastic Munster sides," said O'Connell.
"And as we build for the future I am excited by the prospect of playing my part in achieving success with Munster and Ireland in the coming seasons."
Munster continued their impressive campaign on Sunday, beating fellow RaboDirect PRO12 outfit Edinburgh Rugby 38-6 in their final European Cup pool game.
The victory earned Rob Penney's side a home draw in the last eight, against French giants Toulouse - but O'Connell knows the visitors will be confident.
"It's certainly better than having to go away, there's no doubt about that," he said.
"But a team like Toulouse will have no fears of coming to us and like us they're a team that needs the big occasion to focus their minds.
"I'm sure they will be relishing coming to Thomond Park now. It won't be a bad one for us because it will certainly focus our minds as well.
"They're a real traditional team, a club with a traditional coaching staff, with old-school values, so there will be no better fixture to focus their minds than coming here."
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