Tabarez's team went unbeaten in its three matches against Egypt, Saudi Arabia and Russia in Group A during the 2018 World Cup in Russia.
The Paris Saint-Germain striker Edinson Cavani scored twice in their 2-1 win over Portugal in the last 16 in Sochi. But they were outclassed 2-0 in the quarter-final by the eventual winners France.
Tabarez has been in charge since March 2006 and has led the side to appearances at four consecutive World Cups in Germany, South Africa, Brazil and Russia.
Uruguay will play France on 20 November in a friendly at the Stade de France.