The Ivorian has enjoyed a breakout season for the Red Devils despite the club's turbulent season and has penned a new five-and-a-half-year deal at Old Trafford.
Diallo - who has scored in United's matches against rivals Manchester City and Liverpool this term - said: "I am really proud to have signed this new contract. I have had some incredible moments with this club already but there is so much more to come. I have huge ambitions in the game and I want to achieve history at Manchester United.
"It has been a difficult season for everyone, but I fully believe that we are on the right path and the future is going to be really special. I am ready to give everything to help the team and make our supporters proud again."
Diallo's previous contract was due to expire at the end of the season and United chiefs are pleased to have tied down the player for years to come.
The club's technical director Jason Wilcox said: "Everyone is delighted with Amad’s development; his quality on the ball, versatility and determination makes him a key part of the future of Manchester United. The best years of his career are ahead of him, and we all look forward to helping Amad reach his immense potential and achieve success at the club in the coming seasons."
The attacker joined United from Italian side Atalanta in 2021 and had loan spells at Rangers and Sunderland before establishing himself at the Premier League club this season.