Lennon put pen to paper ahead of the club's promotion play-off semi-final with Edinburgh City on Tuesday night.
The 50-year-old has been a huge success since taking over in November 2017 and has agreed terms on a two-year contract, with the option of a further two-year extension.
He told the club website: "I am really delighted to be committing my immediate future to Clyde. This is a great club, with a proud history.
"I have fallen in love with the club in my time here and I am really enjoying my football. That is incredibly important to me.
"It is an honour to serve the fans, the players, the coaches and the board as manager of this wonderful club.
"My focus and ambition in committing my future to Clyde is to work together with everyone associated with the club to write an exciting and memorable chapter in the history of Clyde, a chapter where everyone is proud of the football we play and the progress we make.
"I think we can do something special and I will be giving everything I can to make our ambitions a reality."
Clyde chairman, David Dishon said: "We are all absolutely delighted to have secured the services of a top manager for at least another two years. When we look back to where the club was on the park eighteen months ago when Danny joined us and see how far we have progressed, I think we can all agree it's an astonishing turnaround.
"I've thoroughly enjoyed every minute of working with Danny and he has all of the qualities I'm looking for in both a manager and a person. He is very well respected by the players, the staff, the board and the supporters. I genuinely believe we are at the start of an exciting journey to get Clyde back up the leagues, with Danny being pivotal in driving that success."