Longmuir was due to come off contract at the end of this season but has struck a fresh agreement with his club, announced on Tuesday.
He will remain as coach without a fixed term, becoming a full-time staff member at the Dockers at the end of his current deal.
Longmuir follows in the footsteps of former North Melbourne coach David Noble, Carlton boss Brendon Bolton and Adelaide's Neil Craig to have moved from fixed contracts to employment agreements.
It is a noteworthy turnaround from Freo, who had only offered the sixth-year coach a one-year extension last season, which ended with the Dockers losing the last four games to crash out of the finals race, finishing 10th.
Longmuir says the move to ongoing employment removes the pressure of securing a new contract.
"I believe the variation better reflects the mechanisms that should be in place for coaches to ensure we have an adequate layer of protection and security for ourselves and our families," Longmuir said in a statement.
"The external expectation for us to perform and deliver success over the coming years is high, as it should be, and the nature of my contract doesn't change that.
"I'm as driven as ever to see this group succeed."
Fremantle chief Simon Garlick backed Longmuir to lead the club to a period of prolonged success.
"We are strongly invested in what we are building here at Fremantle and have high expectations on what we can achieve over the coming years," Garlick said in a statement."Following a number of discussions with Justin, it was clear that those expectations we set ourselves is what drives our ambitions and standards, not the length of a contract."Justin has been building and leading an elite coaching program, and we believe this agreement complements our plans for him to lead us through a period of sustained contention and success."
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