Aaron Wilson of the Houston Chronicle reported Mercilus' deal is worth $54 million, including $24.5 million guaranteed, over four years.
Mercilus had been in the final season of his contract and was slated to become an unrestricted free agent in the spring.
The 29-year-old has registered 7.5 sacks, 48 total tackles and four forced fumbles this season. Since debuting in 2012, Mercilus has logged 50 sacks, 315 total tackles and 13 forced fumbles.
According to Pro Football Reference, the Illinois product is one of 29 players to rack up at least 50 sacks over the past eight seasons.
By retaining Mercilus well into the next decade, the Texans ensured they will have a pair of stellar edge-rushing bookends with J.J. Watt locked up through 2021 on a six-year, $100 million deal.
In the short term, Mercilus will look to be a disruptive force as a pass-rusher when the Texans open postseason play after clinching the AFC South.
Houston has never advanced past the divisional round, but with Mercilus anchoring one side of the Texans' pass rush and Watt set to return from a pectoral injury in time for the AFC Wild Card Round, they should have no problem giving opposing offensive lines fits in hopes of making a run toward Super Bowl 54.