The deal runs through the 2011 season. ESPN and the NFL Network reported on Oct. 26 that the coach had agreed to the deal. The Bills were 5-2 at that point and in contention in the AFC East.
The Bills lost 31-27 to the New York Jets on Sunday, giving up the go-ahead score in the final two minutes.
Jauron, 56-74 in nine seasons with the Chicago Bears, Detroit Lions and Bills, entered this season in the final year of his initial three-year contract with Buffalo.