The scrum-half won his first Ireland cap during last year's summer tour to Argentina.
Marmion's new deal keeps him with Connacht until the summer of 2018.
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Meanwhile Connacht are still awaiting word on how long they will be without Nepia Fox-Matamua.
The flanker was stretchered off during Saturday's Challenge Cup win over Brive with a suspected knee ligament injury.
Fox-Matamua is now waiting on the results of a surgical review.
Andrew Browne will also miss this weekend's Pro 12 meeting with Munster after he had a hand injury surgically repaired.
Both Eoin McKeon and Ben Marshall will continue to go through the return-to-play protocols after suffering suspected concussions in the win over the French side.
