"By taking my term in office beyond the expected period of the Article 50 process, this should help contribute to securing an orderly transition to the UK's new relationship with Europe."
The announcement follows growing speculation that he would step down in 2018 as initially agreed when he took up the post in July 2013.
However despite the extension of his term, his exit in 2019 remains two years short of the standard eight years served by Bank of England governors.
In response Andrew Tyrie, Chairman of the Treasury Select Committee, said that the "decision requires a good deal of examination and explanation, which the committee will seek when it next sees the Governor in a fortnight".
In his letter, Carney said: “I would be honoured to extend my time of service as Governor for an additional year to the end of June 2019. By taking my term in office beyond the expected period of the Article 50 process, this should help contribute to securing an orderly transition to the UK's new relationship with Europe.
"It is an honour and a privilege to serve in this important role. I deeply appreciate your support, that of the Prime Minister, and that of colleagues at the Bank, and I look forward to continuing to promote the good of the people of the United Kingdom during this crucial time for the country.”
In his reply, the Chancellor said: “I am very pleased to hear that you intend to continue as Governor of the Bank of England until the end of June 2019. This will enable you to continue your highly effective leadership of the Bank through a critical period for the British economy as we negotiate our exit from the European Union.”
