Nasa`s Phoenix lander spacecraft has for the first time identified water in a sample of soil collected from the planet`s surface, according to BBC.
Scientists will now be able to begin studying the sample to see whether the planet was ever, or is, habitable.
The craft previously had problems transferring samples from its robotic arm to the onboard lab for analysis.
The success and the good condition of the craft mean the mission will be extended until the end of September.
Since it touched down on 25 May, the Phoenix lander has been studying the surface of Mars to investigate whether it has ever been capable of supporting life.
It has been studying soil with a chemistry laboratory, an oven called TEGA (Thermal and Evolved-Gas Analyzer instrument), a microscope, a probe and cameras.
Scientists told a press conference at the University of Arizona in Tucson that the planet had so far "proved itself to be interesting".
"We`ve seen evidence for this water-ice before in observations by the Mars Odyssey orbiter and in disappearing chunks observed by Phoenix last month, but this is the first time Martian water has been touched and tasted," William Boynton, one of the researchers on the mission, explained.
Phoenix collected some ice samples last week but was unable to transfer them from the mechanical scoop to the onboard oven for heating and testing.
A dry soil sample was taken instead but the scientists found some ice had been collected too and tests were being conducted on it.
The scientists said they had yet to find organic materials in the sample and stressed that it would take three to four weeks for the data to be analysed.
The 90-day extension to the mission means Nasa will be able to dig two new trenches between mounds where ice lasts for longer periods of time, giving it different characteristics.
"Phoenix is healthy and the projections for solar power look good," said scientist Michael Meyer.
"We want to take full advantage of having this resource in one of the most interesting locations on Mars."
Mission chief Peter Smith said ice scooped up by Phoenix`s robotic digging arm was now being analysed to see if conditions on Mars could have supported life.
"We`re looking to understand the history of the ice, by trying to figure out if this ice has ever melted, and through melting has created a liquid environment that modifies soil," he said.
"We`re just getting the data back. Through this we also hope to resolve questions; is this a habitable zone on Mars, meaning that we have periodic liquid water, materials that are the basic ingredients for life forms?" he added.
Nasa also announced the completion of a full panoramic image of the arctic landing site in approximate true colour.
The panorama is made up of more than 400 individual images taken over several weeks and stitched together to form a mosaic.