Rooney had rocked United on Wednesday by revealing that he wanted to leave the Premier League club because they no longer had enough ambition to compete for major honours.
However United reopened talks with Rooney's agent and announced on Friday that the player had made an astonishing u-turn and opted to commit his long-term future to the club.
A statement on the club's website said: "Wayne Rooney has agreed a new five-year contract to stay at Manchester United until at least June 2015.
"The agreement follows intensive discussions between the Club and the player's representatives and means that by the end of his contract Wayne will have been a Manchester United player for 11 years."
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