Lynton joined Sony Pictures in January 2004 and steered the studio to an industry record $1.7bn domestic gross and a record 13 number one debuts in 2006 alongside co-chairman Amy Pascal, whose contract was extended last year until 2011.
SPE also enjoyed its best year ever in 2006 with more than $3.3bn in worldwide box office receipts.
Lynton has presided over the studio's entry into digital distribution, development of the Blu-ray HD DVD platform, and the acquisition of online streaming network Crackle.
Sony Pictures studio crossed $1bn in domestic grosses for 2007 last week, marking the sixth year in a row it has reached the milestone.
Earlier this year Spider-Man 3 re-wrote the record books with the biggest three-day opening weekend of all time on $151.1m.
Sony Corporation co-chairman and chief executive officer Howard Stringer hailed Lynton's financial acumen and firm grasp of content in the digital era as 'exactly what's needed to lead a studio in the 21st century.'
'I am grateful to Howard for his confidence in me, and thankful that I have a chance to work with some of the best minds in the entertainment business, starting with my partner, Amy Pascal, as well as everyone who has helped us achieve so much these past few years,' Lynton said.