The 27-year-old British and Irish Lions flanker has played 128 times for the region since making his debut in 2009.
In March 2015, he became the 26th player to make at least 100 appearances for the Pro12 club.
"It was an easy decision," he said. "We are going in the right direction and I'm happy to sign for the team I support. It's a good place to be."
Tipuric is the third highest-scoring forward in Ospreys history, his 19 tries leaving him one behind Alun Wyn Jones and Ryan Jones.
Having won his Wales debut in 2011, he won his 44th cap in Saturday's 32-8 defeat by Australia in Cardiff.
"There have been some ups and downs over the last few seasons but we've learned from them and are in a much better place," he said.
"With some experienced players added to the squad, key players re-signing and plenty of young talent coming through it's an exciting time for the Ospreys."
Tipuric made 32 appearances for Aberavon before making his regional debut and became Ospreys' second-youngest captain, aged 21, when they faced Leinster in January 2011.
"Not only does he have phenomenal talent, he has a work ethic to match, which is the secret of why has become one of the best sevens around," said head coach Steve Tandy.
"When you look at him in our environment, head down and working hard, you realise what a great role model he is, whether that be working hard with the youngsters to help them improve, or leading by example striving for excellence in his own game, he is relentless."
Wales forward Justin Tipuric has signed a new contract that will keep him with Ospreys until 2020.