The restrictions were first put in place in 2007 when the two countries became members of the European Union.
It means Bulgarian and Romanian nationals remain restricted to jobs that are either skilled or in sectors where there is a shortage of UK labour.
Under European Law, the restrictions cannot continue beyond the end of 2013.
After then, they will be lifted.
Immigration minister Damian Green said he had decided to extend the restrictions as he wanted to ensure migration from those countries delivered economic benefits to the UK and that he did not want migration to have adverse impacts on the domestic labour force.
He said: “Economic events of recent years have inevitably impacted upon labour market conditions in the UK but the labour market has demonstrated a high degree of resilience, particularly in terms of levels of employment, during and since the recession.
“However, labour market conditions, and the extent to which they are affected by migration, are very uncertain in the current economic circumstances.”
A report by the Migration Advisory Committee published on 4 November had recommended the restrictions be extended, saying the UK labour market was in a state of serious disturbance and that lifting the current restrictions at this stage would risk negative impacts on the labour market.
Mr Green said that, while migration flows from those two countries had been relatively low, the number of Bulgarians and Romanians resident in the UK had increased substantially since 1 January 2007.
“Removing the current restrictions would cause migration to increase and cause those who currently come to the UK for temporary purposes to seek more permanent employment in the UK,” he added.
Sir Andrew Green, chairman of Migration Watch UK, said: “This is absolutely the right decision.
“With 2.5 million people unemployed, it would be absurd to open our borders yet again to more unskilled workers.”
The annual quota for the Seasonal Agricultural Workers Scheme (SAWS) will continue at 21,250 places for 2012 and 2013 and the annual quota for the Sectors Based Scheme (SBS) will continue at 3,500 places for 2012 and 2013.