The new deal will keep the 21-year-old back rower at the Club until the end of the 2020/21 season.
Mercer has made 38 appearances and has drawn wide acclaim for his performances in the Blue, Black and White, with the 21 year-old finishing the 2017/18 season with six tries. The back rower also caught the eye of England Head Coach Eddie Jones, making his debut against the Barbarians in May.
Mercer, who was promoted to the senior squad from the Academy in 2017 said: “I couldn’t ask for a better place to continue my development – we’ve got a great setup with the coaches and players along with an amazing supporter base.
“It’s a really exciting time to be part of this Club, and our challenge now is to make sure we’re up there competing with the best in the (Gallagher) Premiership and Europe.
“Zach is a huge talent, and we’re really pleased to have secured his future with the Club.” said Director of Rugby, Todd Blackadder.
“Over the last two years, he has worked incredibly hard at all the aspects of his game; this has paid dividends and is clear to see in his dominant performances. He has got all the attributes to become a world-class player, and it’s great to know that he sees Bath as the place to do that.
“With the likes of Toby (Faletau) and Francois (Louw), he’s got some of the best players to learn from and I’m sure he’ll continue to thrive in this environment over the next three years.”