The 19-year-old made the switch to the Imtech Arena in 2012 from Karlsruher on a four-year deal, but was loaned back to the club in their successful promotion bid to the German second tier in the 2012-13 season.
Calhanoglu has become a mainstay in Hamburg's first-team this season, however, scoring five goals in 18 top-flight appearances for Bert van Marwijk's charges.
And he is thrilled to be extending his stay in Germany.
"I always said that I'm happy in Hamburg," he told the club's official website. "I would like to play for this club in the Bundesliga for a long time yet and I want to become a regular in the team.
Hamburg have endured a torrid campaign thus far, with the club slipping to 17th in the table after a 3-0 loss at Hoffenheim on Saturday.
The Turkey international stated that helping the club fight relegation was one of the motivating factors behind his contract extension, adding: "I also wanted to make a statement in our difficult situation."
Hamburg sporting director Oliver Kreuzer was also delighted to extend the youngster's stay, and believes Calhanoglu has a promising career ahead of him.
"We're delighted to have tied down a young player with great prospects in the long term," he said.
