There is also an option to extend his contract by another year after the United academy product reportedly increased his weekly wages from £2,000 to £20,000-a-week.
Blackett has made 10 appearances for the Red Devils since making his debut against Swansea on the opening day of the season, and manager Van Gaal believes his progression illustrates the success of their academy.
Van Gaal told United’s website: “I am delighted that Tyler has signed a new contract. He is another young player that has risen through the Academy system to break into the first-team squad this season.
“Tyler has great potential and I believe he is at the right club to continue his development and progression to become a great defender.”
The highly-rated youngster follows Jesse Lingard and Patrick McNair as the third academy product to extend their contract this season.
The 20-year-old has had an eventful season. He was sent off during United’s 5-3 loss to Leicester, but he has also impressed in wins against Arsenal and Queens Park Rangers.
The central-defender could not contain his excitement after the news became public following United’s announcement.
Blackett said: “I’m thrilled. I’ve supported United all my life. To make my debut this season was a dream come true.”
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