The wing has represented England A and England U21, being an integral part of the U21 World Cup team in 2004. He is also a member of the England Sevens set-up.
"Marcel is a proven finisher who has rediscovered some of his best form this season," said Director of Rugby Mike Ruddock.
"Given our desire to play open and attacking rugby it is important to have top class finishers and pace and Marcel has these qualities.
"Other clubs were interested in securing Marcel's services, but he believes in what we are trying to achieve here at Warriors and wants to be part of that journey."
Powell joined Warriors from Cardiff Blues in March 2006 and boasts a wealth of big game experience having played in over 20 Heineken Cup matches.
A former Wales A captain, Powell has won full international honours and under the guidance of Ruddock is determined to compete for the starting number nine shirt after recently returning from a broken foot.
"Ryan has had a good season so far even though he has been hampered by a foot injury suffered earlier in the campaign," said Director of Rugby Mike Ruddock.
"At that time he had secured the number one scrum half position but unfortunately he was unable to build on that because of a broken bone in his foot.
"However, over the next two years we expect him to put even more pressure on to secure that starting position at Warriors.
"Ryan has pace and excellent service and has already been capped by Wales. If he continues the improvement in his game there is a chance that further caps will follow."
* Warriors have confirmed that Tim Collier has joined Launceston on loan and Less Best has moved to London Welsh on loan.