The defender has agreed new terms on Wearside until summer 2029, with a Club option of an additional year.
Ballard said: “I’m absolutely delighted to have signed a new contract. From the moment we began talks, it felt like an easy decision, and I’m happy to be extending my time at the Club.
"Achieving promotion last season was incredible, and I feel very fortunate to have played a part in some special moments in the Club’s recent history. My aim this season was to stay in the team, compete every day, and keep working hard to contribute. Hopefully, I can continue improving and help drive the Club forward for many years to come.”
Sunderland football chief Florent Ghisolfi added: “Dan represents both the legacy and the future of Sunderland AFC. He embodies our identity through his professionalism, consistency, and spirit.
"He has grown into a Premier League defender, but just as importantly, he has become a leader within our dressing room. We are proud that he believes in our purpose and our ambition. His commitment to Sunderland is a powerful message about who we are and what we intend to build.”