The deal will expand the 43 year old's presence at the movie studio, where he has released his successful Jackass franchise.
He says, "I am over the d**n moon about continuing an amazing partnership with Paramount Pictures. I have many more films to make and bones to break. I am glad I will be doing it for Paramount."
A statement from Adam Goodman, the president of Paramount Film Group, reads: "Johnny has literally put life and limb on the line to create the kind of groundbreaking comedies that audiences the world over flock to in greater and greater numbers. With Bad Grandpa, we saw his undying commitment to great storytelling go beyond what audiences had seen before with a more narrative style that also showcased his incredible comedic abilities."