It was awarded the initial services contract in 2014, with the extension commencing last month.
As a commercial enterprise of Divine Word University, Diwai also undertakes the training and housing of medical students specializing in rural health in an attached facility.
Managing Director Peter Graham said: "We are very pleased to continue our relationship with Diwai Pharmaceuticals - a subsidiary of Divine Word University - to provide quality health services and help prepare the next generation of rural health workers."
The hospital provides health services to Ok Tedi employees and their dependents, contractors and members of surrounding communities.
76% of the hospital's $A10.2 million (K24 million) annual budget comes from Ok Tedi Mining while the remaining 24% comes from the Fly River provincial government.
Last year it achieved a level 5 health facility rating after undergoing a National Health Service Standard Role Delineation assessment and operated a vaccination program in response to a polio outbreak in June.