Mr Sunak said the scheme will pay up to 80% of a person's wage up to £2,500 a month.
"The security we are providing will protect millions of jobs," he added. He told the Commons that the government will review the policy in January.
About £40bn has been spent on the furlough scheme since it was introduced in March, and about 9.6 million people have benefited at one time or another, with a steep take-up in the first few months.
It is unclear whether the scheme has genuinely safeguarded viable jobs or merely delayed the inevitable disappearance of unviable ones. However, for now, it hopefully provides some security for those who are furloughed.
The chancellor told the Commons his intention was "to give businesses security through the winter".