The Lions coach has overseen dramatic improvement at the Gabba since his arrival in 2017, the club knocking on the door of an AFL premiership after reaching preliminary finals in two of the last three seasons.
Fagan will remain at the helm until at least 2025, the extension endorsed despite an investigation into claims raised last year remaining open.
Fagan and former Hawthorn coach Alastair Clarkson, now in charge of North Melbourne, stood down from their positions when the allegations were first raised.
The Brisbane coach has stressed he has a "clear conscience" but is yet to be interviewed as part of the investigation, which he initially thought would be completed late last year.
"I'm just patiently waiting for my opportunity to speak at the investigation, Fagan said in December.
"You'd like it to happen sooner rather than later. But I've got to be patient."
Confirmation of Fagan's contract extension was delivered at the bottom of a club statement on Wednesday that championed Harris Andrews and Lachie Neale's co-captaincy.
Brisbane Lions chairman Andrew Wellington said Fagan was the man to realise the side's potential after a profitable off-season of recruitment.
"Chris has played a key role in the resurgence of our club in recent seasons, including creating an environment that has enabled us to attract and retain great talent," he said in the statement.
"It's exciting that Chris has the opportunity to continue to take us forward and achieve the success we believe this playing and coaching group is capable of."
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