Ighalo, 30, joined boyhood club United on a short-term loan deal on transfer deadline day in January but his original contract expired on Sunday, 31 May.
United and Shenhua had been locked in negotiations to extend Ighalo’s stay and an agreement has now been struck for the striker to remain at Old Trafford for another seven months.
United will pay a portion of Ighalo’s wages and a fee to Shanghai.
The development means Ighalo will miss a large chunk of the Chinese Super League which is expected to begin next month.
Ighalo’s current contract in China expires in December 2022, but Shanghai reportedly want to keep him until at least December 2024.
A lifelong United fan, Ighalo has proved a success and has scored four goals in eight appearances including a memorable volley in the 5-0 win at Lask on 12 March.