The 71-year-old's contract was set to expire on July 1, but the team has reportedly agreed to a long-term extension that will keep him manning the phones for the Sens as the team's GM for at least another two years and he will stay on in a significant capacity with the organization after that.
Murray originally signed on as head coach with the Sens in the 2005-06 season, eventually leading the team to a Stanley Cup Final appearance the following season.
In 2007, Murray took over as the team's GM and has compiled 190-204-59 record since then.
The Senators made a surprising step forward in the past couple of seasons with Murray at the helm. The hiring of head coach Paul MacLean, along with several key acquisitions has seen the club make back-to-back playoff appearances.
Ottawa currently sits one point back of the Carolina Hurricanes for the 8th and final playoff spot in the Eastern Conference.
The news comes a day after Murray's nephew and assistant general manager Tim Murray departed for the GM job of the Buffalo Sabres.