McLaren, whose drivers are Britain's Lando Norris and Australian Oscar Piastri, are the first customer team to commit to the new Mercedes power unit alongside the works outfit.
"It has been a cornerstone of our motorsport strategy to work with strong customer teams," said Mercedes F1 boss Toto Wolff in a statement ahead of the season-ending Abu Dhabi Grand Prix.
"This has many advantages: it gives a clear competitive benchmark, accelerates our technical learning, and strengthens the overall F1 business case for Mercedes-Benz."
McLaren are fourth in the constructors' championship, ahead of Aston Martin who will be switching from Mercedes to Honda engines in 2026.
Mercedes also power Williams but the new engine era will see the number of manufacturers increase from four at present - Mercedes, Ferrari, Renault and Red Bull/Honda - to a potential seven with Audi entering in 2026 and Red Bull starting a new partnership with Ford.
General Motors have formally registered with the governing FIA to provide power units for a proposed Andretti Cadillac team from 2028.
The new power units from 2026 will be 50% internal combustion and 50% electric, with a maximum output of more than 1,000 horsepower, and run on 100% sustainable fuel.
Former champions McLaren have used Mercedes engines since 2021 and were also partners with the German brand from 1995 to 2014.
"We have great confidence in Mercedes and our relationship with them," said McLaren team principal Andrea Stella.
"They’ve supported our journey back to the front of the grid so far, and the security and stability this partnership brings is vital in ensuring we remain on this upward trajectory."
McLaren are the most recent customer team to have won a Grand Prix, at Italy's Monza circuit in 2021, and have had 15 podium finishes in the last three seasons.
"The extension signifies the confidence that our shareholders and the wider team have in their powertrains and the direction we’re taking with them into the new era of regulations ahead," said McLaren Racing boss Zak Brown.
