The 69-year-old former Torino boss took over on a two-year deal after Antonio Conte left to join Chelsea in June last year.
But his record of winning seven of his 10 games in charge has convinced FIGC president Carlo Tavecchio to extend his contract beyond the 2018 World Cup in Russia.
“The president of the federation announced the extension of the national coach’s contract until the next European championships (2020),” the FIGC said in a statement.
Italy are second in Group G for European 2018 World Cup qualifying with five wins and a draw from six games, second behind Spain on goal difference.
Italy and Spain — who drew 1-1 in their previous qualifier — play in Madrid on September 2 in a decisive clash with only the top-placed team qualifying directly for the World Cup in Russia.
Tevecchio credited Ventura with rejuvenating the ageing four-time World Cup winners over the past year.
“He (Ventura) has also developed a technical project reserved for emerging young players,” the FIGC added.
