Diekmeier's previous deal was due to expire at the end of this season, leading to persistent speculation over the full-back's future in recent weeks.
Hamburg general manager Oliver Kreuzer released a short statement earlier this afternoon revealing that Diekmeier had signed fresh terms, committing his future to the club until 2016.
The statement read: "We are happy to have agreed a new contract with Dennis Diekmeier.
"We have always said we would like to keep on with him at our club. Dennis is an important player in our squad, he has made great progress and is still just 24."
Diekmeier has become a consistent feature in Hamburg's defence since joining from Nuremberg in 2010, making 69 appearances in all competitions.