His side are now in third place, and would face an away tie with Edinburgh at the semi-final stage in May as the Scottish team currently occupy second place on the table.
Phillips will now spend a minimum seven-year spell with his region, after moving to the Liberty Stadium in 2007 from the Cardiff Blues. He has made a significant impact at international level, replacing Dwayne Peel as the first-choice number nine his country.
To date, he has won 38 Wales caps, including a Grand Slam in 2008, and three for the Lions.
Having recently returned from a long-term ankle injury Phillips is in contention to play a part in Wales' trip to face Ireland in their next Six Nations challenge on Saturday. He was rushed back into the international picture for their loss to France after only one half of domestic rugby but remained on the replacements' bench.
He has highlighted his ambitions to keep the Ospreys amongst the elite sides in Europe. He said: "With my future sorted, it means that I can just concentrate now on getting myself up to speed for some of the big games that we've got coming up. We have ambitions to be among the best sides in Europe, we aren't there yet but we are heading in the right direction. With the set-up here, everything is in place to go all the way and I'm excited about the future for the Ospreys. There's a lot of expectations on us, but that's something that we just have to live with."
On a personal note, Phillips cites the next Lions tour, to Australia in 2013, as a major factor in his decision to extend.
"The Ospreys have helped me to develop as a player no end over the last three years, the improvement in my game has allowed me to represent Wales and the Lions while I've been here," he said. "I want to further my international career with Wales over the next few years and get on the next Lions tour, and if I'm going to achieve those longer term aims, then the Ospreys and the coaches here will clearly be a big factor in that, like they have been with everything I've achieved since coming here.