Target declined to confirm the figures involved but the UK’s Press Association reported the deal to be worth potentially around 20 million pounds ($26.86 million) over 10 years for the world number one.
The partnership extension comes hot on the heels of Littler's second consecutive world title triumph last week, which netted him one million pounds in prize money - double what he earned for his maiden championship a year earlier.
The relationship between 18-year-old Littler and his sponsor stretches back several years, with Target chairman Garry Plummer recalling their first meeting.
“I met Luke at the BDO Youth World Championship Qualifier when he was 12, and that day his dad asked if we would sponsor him," Plummer said.
“We’d never taken on someone so young, but I saw something special in him and saying yes was easy. Watching him grow since, as both a player and a person, has been a privilege.
"His achievements on and off the oche have been remarkable, and this new agreement celebrates everything we’ve built together and the exciting future ahead."
Littler thrashed Dutchman Gian van Veen 7-1 to win his second PDC World Darts title at a raucous Alexandra Palace on Saturday.
Littler expressed his delight at cementing the long-standing partnership.
"Target has believed in me from day one and I'm delighted that there are many more years to come," said Littler, whose rise in the sport has been mirrored by a surge in demand for tickets.
"From my playing career to my product range, we've built everything together and I'm really excited to commit to our partnership long-term and see where we can take this next."
The close relationship between player and brand was further highlighted following Littler's title triumph when he purchased a brand-new set of Apple AirPods for every member of Target Darts staff as a thank-you gesture.