The State Government has signed a three-year deal to fund the Mandurah Crab Fest until 2021.
The event attracts around 100,000 attendees each year; boosting the local economy.
It showcases Mandurah's coastal lifestyle and features cooking demonstrations with chefs and celebrities, live music, market stalls, entertainment, free workshops, art displays and fireworks.
The State Government is funding the event through Tourism WA's Regional Events Program.
Tourism minister Paul Papalia says over the past 20 years, the Crab Fest has grown into one of Western Australia's largest free festivals.
"The State Government's sponsorship until 2021 will help the event deliver greater tourism outcomes," he said.
"The festival not only showcases the Peel region, but also encourages visitors to extend their stay and enjoy other tourism experiences on offer in the area."
Regional Development minister Alannah MacTiernan says the Crab Fest drives economic growth and job creation for the Peel region.
"Regional events play an important role in strengthening the local economy by promoting centres like Mandurah as agri-tourist destinations and giving a real boost for local businesses," she said.
This years' Crab Fest is on March 16 and 17.