Danny Haynes has signed a new contract that will keep him at Portman Road until the summer of 2010.
The 19-year-old striker had a year to run on his current deal but that has now been extended to keep him with the Blues for another three years.
"It's great news for Danny and great news for this Football Club," Town boss Jim Magilton told the Club website.
"He has made massive strides over the past 12 months. He has seen the benefits of what hard work can achieve in football and we know there is a lot more to come from him.
"He deserves his contract and now he needs to put that in his bottom drawer and come back to me in a year or so and say to me 'I'm a regular in your side and now I want to talk about an improved deal'.
"He has been rewarded for the hard work he has put in and the challenge is there for him now to stake a claim for a regular place in the side."
Subscribers to Town's SMS service heard this news first. Be the first in the know with SMS.