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The deal keeps Mr Barr at the club until May 2029.
The Northern Premier League side has also secured the futures of assistant manager Lee Andrews, goalkeeping coach Billy Redden, and physio Caitlin Gribbin, ensuring continuity across the first-team setup.
A club statement said these extensions are part of long-term plans to build stability as Workington prepares to return to a new home facility.
The club said: "The foundations are being laid.
"The ambition is clear.
"And we're building for the future, together."
Officials praised Mr Barr and his team for their professionalism, commitment, and the progress made both on and off the pitch since taking charge.
They said that securing the management team is vital to providing leadership and continuity as the club enters what it called an "exciting new chapter."
The board also emphasised that while progress has been made, the club remains ambitious and believes the current groundwork will lead to further success in the years ahead.
Workington AFC compete in the Northern Premier League and are aiming to build on recent improvements as they look to the future.