Director of Cricket Mick Newell was pleased to reach agreement with Lumb who has become a Nottinghamshire regular in all formats since joining from Hampshire in 2012.
“Michael has become a key figure for us in all formats and we were very keen to secure his commitment with an extended contract,” said Newell.
“The IPL was a factor in the negotiations but it was clear that his ambitions were identical to the aims of the squad and his batting will be important in enabling us to achieve them.”
The Club have already reached agreement with Samit Patel and Alex Hales who will be allowed to feature in the lucrative league if they are successful in securing top bracket contracts but Lumb has committed his future to county cricket.
“I’ve played in the IPL and I feel as though I’ve ticked that off my list and now I want to win more trophies with Nottinghamshire,” said Lumb.
“The four-day game is the pinnacle of country cricket and I take pride in my responsibility to contribute consistently as a senior player.”
Lumb was a leading light for Nottinghamshire in 2013 with a career best innings of 221 helping him to surpass a thousand runs in the LV= County Championship while his explosive 96 against Durham in the twenty-over competition set a new batting record for Notts Outlaws.
He will travel to Australia this week to re-join Sydney Sixers for the Big Bash competition before joining the England squad for three Twenty20 Internationals from late January.