The new deal with Ferrari provisions for supply of the 'latest power unit specification' - a change from the 2017 status quo, with Sauber currently using year-old Ferrari power units in their C36.
"I am very pleased to confirm that we will continue to work with Scuderia Ferrari as our engine supplier in form of a multi-year agreement," Sauber's new team principal Frederic Vasseur said.
"The shared experience between the Sauber F1 Team and Ferrari has built a strong foundation, which will allow us to move forward swiftly and efficiently, also in terms of the development of the 2018 car.
"I am convinced that together we can achieve the results which reflect the passion and determination that is, and always has been, behind the Sauber F1 Team."
Sauber and Ferrari have a technical relationship that dates back to 1997 - while the team's best results in F1 as an independent constructor, two second places in 2012, were also scored with Ferrari power.