The 18-year-old joined the Cherries in June 2013 after impressing in a game against the club while on tour.
The Australian stopper has travelled with the first-team squad this season to Anfield and Stamford Bridge, and was particularly under the spotlight prior to the Chelsea game due to a number of goalkeeping injuries.
Speaking exclusively to Cherries Player HD, Holmes expressed his delight at being able to continue his career with AFC Bournemouth.
"I’m really over the moon to sign this new deal," he explained.
"The club have been great with me ever since I arrived and to get it sorted is just surreal.
“I was looking at the contract and saw that the first time I signed was in 2013, I can’t believe I’ll have been at the club for five years in total - hopefully there will be many more to come.
"I remember coming to trial to here back in League One. Even then the team spirit was great and the ambition was there, too. I'm so happy to be here and I am still learning so much all the time."
Cherries Player HD subscribers can watch the full interview with Holmes where he talks about his experiences coming from Australia as well as his journey so far with the club below.