The 30-year-old former London Irish full-back's decision is almost certain to keep him out of the England reckoning.
England strictly adhere to their policy of not selecting foreign-based players, and Armitage's decision suggests he will not be eligible for the 2015 Rugby World Cup.
Armitage signed a two-year deal when he joined Toulon in 2012, and told the club's official website he is excited to stay with the club.
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He said: "I'm glad I've extended with a club where I feel good and with whom I hope to win more titles."
Armitage's younger brother Steffon recently extended his contract by three years, committing his long-term future to the club run by comic book magnate president Mourad Boudjellal.
Delon Armitage has won 26 caps for England, but has not played since leaving Irish for France.
And this latest contract to stay in the Top 14 league will likely prolong his international exile.
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