It's a major boost for Latics who know 20-year-old Baines has plenty of admirers in the Premiership.
They hope he can achieve top flight football with them and are now in a stronger position to ward off interest from the likes of Everton who have tracked him for some time.
It's the fourth contract extension the club have negotiated in recent weeks with Ian Breckin, Lee McCulloch and Matt Jackson putting pen to paper on new deals.
Talks are also underway with goalkeeper John Filan over a two-year extension, although an agreement has yet to be reached.
Baines was training with the England Under-21 squad today ahead of tomorrow night's friendly against Holland at Derby's Pride Park.
He had an injury scare during Saturday's 1-0 home defeat to Stoke City, forced off the pitch for five minutes early in the second half to have stitches inserted into a cut above his eye.
But was able to resume and will be hoping to pick up a third Under-21 cap, following appearances against Austria and Poland last year.
The defeat to Stoke saw Latics lose ground on leaders Ipswich – the gap is now five points – while only goal difference kept them above third- placed Sunderland.
Manager Paul Jewell was disappointed at the loss, not least because his side had enough of the play to claim at least a draw.
And he's urged the players to show a cooler head when chasing a game rather than getting over anxious.
Gifton Noel-Williams' 39th minute goal proved the matchwinner, Latics unable to carve out an equaliser despite dominating possession.
Jewell said: "In the first half we played some good stuff but what we didn't do was make their keeper work hard enough.
"He probably had no more than two or three saves to make in the game and we need to be better than that.
"If you don't score when you're on top you are always liable to be hit by the sucker punch and that is what happened.
"Stoke are a difficult side to break down once they go in front and credit to them for being tough to crack.
"We didn't have the guile or quality in the right areas during the second half to give them any problems.
"It's a failing of ours that when a team sits back and defends, we don't find it easy to cope with.
"We are okay when teams come on to us but not when a side is content to stay deep and defend.
"If we are going to get promotion we have to be able to win matches in all sorts of ways.
"The higher up in football you go, you have to be more mentally stronger, and if we go a goal down we have to deal with it.
"It would be interesting to see how often we have come from behind to win a game in the last year and a half, and I bet it's not too many.
"On Saturday, the players were trying to win it on their own instead of sticking to what we work on.
"They were only doing that for the right reasons, not to try and be Billy Big Time, but doing that sees them get anxious and we lose our shape.
"In the first half, we played some really good stuff but in the second-half we didn't look like scoring a goal.
"We were shooting from 40 yards which you can understand them doing when Stoke have 10 men behind the ball.
"But we have to learn to put in that extra pass and have more quality about ourselves."
On the transfer front, Jewell was unable to get any fresh faces in ahead of the Stoke clash but efforts will continue this week.
His interest in bringing Southampton striker Brett Ormerod to the JJB remains despite a deal which would have seen him come on loan for the rest of the season, breaking down last week.
And there's still the chance of signing Ade Akinbiyi from Stoke – the striker missed Saturday's game with a thigh injury – although Sheffield United have made an improved bid.