The existing contract, under an extension agreed in 2023, had been due to run until 2030.
Interlagos, officially named the Autodromo Jose Carlos Pace after Brazil's 1975 race winner, first hosted a world championship grand prix in 1973. It is currently the only South American round of the championship.
The atmospheric circuit has witnessed some major milestones in the sport's history, including the late triple champion Ayrton Senna’s emotional home win in 1991, Kimi Raikkonen winning the 2007 title for Ferrari and Lewis Hamilton's first with McLaren in 2008.
"Brazil is an important part of Formula One’s history and our future, and I am delighted that this five-year extension will see us continue racing in Sao Paulo until 2035," said Formula 1 chief executive Stefano Domenicali.
"The passion of our Brazilian fans is extraordinary and every time we return to Interlagos we feel their energy in the grandstands and in the city of Sao Paulo."
The announcement came as neighbouring Argentina pushes for a return to the calendar, with Buenos Aires' Oscar y Juan Galvez Autodrome undergoing renovations aimed at achieving FIA Grade One status.
Buenos Aires Mayor Jorge Macri, who was at Interlagos this weekend, said on social media that he had met Domenicali and presented a proposal for the sport's return to the Argentine capital, which last hosted a race in 1998.
"We have mayors from other cities around the world visiting the circuit here but they will not leave with a contract for their cities," Sao Paulo Mayor Ricardo Nunes told reporters.
"What they will take home is very nice memories of a great spectacle that we will hold here this week in Sao Paulo."
Formula 1 said the new contract involved "significant investments" by the city to improve the fan experience.
Nunes said the race generated a "major economic and financial gain" for Sao Paulo, estimating that this week's event would move around 2.3 billion reais ($417.78 million) through the local economy.
He said hotels, restaurants, taxi drivers and ride-hailing services were benefiting from the influx of visitors. The mayor added that tickets had sold out quickly despite organisers increasing capacity by 7,000 seats compared with last year.
Brazilian fans have extra reason to celebrate this weekend, with the country having two Formula One drivers on the grid for the first time in a decade.
Audi's Gabriel Bortoleto has been joined by Haas rookie Rafael Camara, who replaced Esteban Ocon, while Argentina is represented by Alpine's Franco Colapinto.