The programme's original five-year mandate, which called for spending $15bn, expires in September 2008, and Bush asked Congress to renew it.
"When I took office, an HIV diagnosis in Africa's poorest communities was usually a death sentence. Parents watched their babies die needlessly because local clinics lacked effective treatments," he said.
"Once again, the generosity of the American people is one of the great untold stories of our time."
Tony Snow, the White House press secretary, said the specific goals for the next five years - Bush leaves office on January 20, 2009 - are to treat 2.5 million people, prevent more than 12 million new infections and care for more than 12 million people, including five million orphans and children.
The president said, "This money will be spent wisely," in nations where it can have the greatest possible impact and be sustainable.
Bush also announced that his wife, Laura, will visit four African countries - Zambia, Mali, Mozambique and Senegal - which have benefited from the US programme and will report back on her findings. The trip will be from June 25 to 29.
The president's announcement comes before next week's annual summit of industrialised nations in Heiligendamm, Germany.
Germany is pledging to make Africa a central issue and is calling for more aid, further debt relief and improved financial oversight.