Sounders reached the Western Conference semi-finals for the seventh consecutive year by finishing fourth in the regular season, but they were knocked out of the playoffs by Dallas on penalties after a 3-3 aggregate draw earlier this month.
However, despite the disappointment of failing to go further in the postseason, the club have announced that Schmid will return to lead the side again in 2016.
General manager Garth Lagerwey told reporters: "Let me put something to bed: Sigi is our coach. Sigi will be our coach. Sigi is my coach."
Schmid has coached Sounders in every season that the expansion franchise have played in MLS.body check tags ::