Folau had all but inked the new contract as early as October last year, telling media of his decision to commit for the long-term ahead of the third Bledisloe Cup match in Tokyo.
This new agreement, though, was not officially confirmed until Saturday morning.
In a statement, Folau expressed his gratitude to Australian rugby for giving him an opportunity back in 2013, when he joined the Waratahs from AFL team the GWS Giants.
“I’m really grateful to Rugby Australia and the Waratahs for all they have done for me," he said.
"When I made the switch to rugby five years ago, I could never have dreamed that it would have gone this well.
"The World Cup is a big target of mine this year and I believe this Wallabies group can go a long way if we keep on improving. I'm looking forward to working hard and doing whatever I can to help the team achieve what we want to achieve both this year and into the future.
“I've also been very fortunate to win a title with the Waratahs in 2014 and looking at the squad right now with some of the young players we’ve got coming through, the future is very bright and I want to be a part of that.”
Wallabies coach Michael Cheika said in the release that the commitment showed Folau's hunger to continue to make an impact in rugby.
“Israel’s contribution to the Wallabies since making the switch shows why he’s one of the best players in the world," he said.
“It is great to see him make a long-term commitment to the Wallabies and Waratahs and I know that he’s still very keen to become an even better player in that time, as well as achieve success with the Wallabies."