Specifics of the deal were not disclosed. It comes after Carlisle led the Pacers to a season-opening 143-120 win over the Washington Wizards on Wednesday.
The victory was his 897th career win, bringing him closer to the 900 milestone only 13 other NBA coaches have achieved. Among active coaches in the league, he holds the second-most career wins behind San Antonio Spurs coach Gregg Popovich. The Spurs legend is the NBA's all-time leader with 1,366 victories.
Carlisle can celebrate his extension and his birthday the same weekend as he turns 64 on Friday.
His career began as a player in the Boston Celtics’ '80s dynasty led by Larry Bird. He originally joined the Pacers as an assistant under Bird in 1997. He left in 2000 to lead the Detroit Pistons for two seasons and returned to Indiana as head coach from 2003-07.
Carlisle won 61 games in his first season at the helm of the Pacers, but the notorious “Malice at the Palace” brawl with the Pistons in 2004 hampered the team’s success. He led to Pacers to 44 wins that season, but the team wouldn't finish over .500 until 2011-12 after Carlisle had already moved on.
He became one of 12 people to win NBA championships as a player and a coach when he led the Dallas Mavericks to their first title in 2011.
Carlisle spent 13 seasons with the Mavericks before returning to the Pacers in 2021. The team won 25 games in 2021-22 and 35 last season as Indiana continues to rebuild.
Carlisle, who is also the longtime president of the National Basketball Coaches Association, appears to be a central part of that effort.