The powerful 22-year-old enjoyed a breakout debut season with the Waikato Chiefs in Super Rugby last year before making his test debut off the bench against Fiji in San Diego in July.
"Wallace has made a great start to his professional career," New Zealand Rugby's Chris Lendrum said in a news release.
"To receive the 2024 World Rugby Breakthrough Player of the Year award was recognition of Wallace's athletic prowess, but also his dedication to constant improvement.
"We're looking forward to a continuation of his growth over the next two years."
The All Blacks have struggled to find a like-for-like replacement for Kieran Read in the number eight jersey since the former skipper retired after the 2019 World Cup, with many considering incumbent Ardie Savea more naturally a flanker.
The re-signing is also a big boost for the Chiefs, who set the pace in Super Rugby Pacific this season and welcomed back Sititi from injury a couple of weeks ago for the run-in to the playoffs.
"The Chiefs took my family in with open arms and welcomed us right from the start. We really feel at home here. I know my parents and my family enjoy being part of the team culture just as much as I do," Sititi said.
"I love playing for the Chiefs. Their style of play suits me. There is still a lot of room for me to grow and develop as a player and I think the best place for me to do is here in New Zealand with the Chiefs."