Herrera's deal had been set to expire at the end of the season but according to English publication 'The Daily Mail', United have moved to activate their one-year extension to prevent the player from opening talks over a bosman move in January.
Spanish giants Atletico Madrid have been showing considerable interest in taking the former Athletic Bilbao man back to his homeland but United are thought to be keen to retain the player, with talks over a long-term deal set to get underway in the coming weeks.
The aforementioned source reports that Herrera is happy in Manchester and is enjoying working under United boss Jose Mourinho.
The 28-year-old won United's Sir Matt Busby Player of the Year award in May and was also named Man of the Match in the Europa League final win over Ajax.
He has found game time harder to come by this season following the arrival of Nemanja Matic but he is believed to be still well thought of in the corridoors at Carrington.
United are expected to activate similar options in the contracts of Juan Mata, Luke Shaw, Ashley Young and Daley Blind, though midfielder Marouane Fellaini appears to be set to leave the club on a free at the end of the season if nothing changes.