A panel of federal judges had previously moved a deadline to reduce the state's prison population to about 110,000 inmates to February.
The extension was necessary for a court-appointed mediator to help find a long-term solution to the problem with Governor Jerry Brown's administration and attorneys representing inmates. The talks between the parties are ordered to continue until January 10.
California is pushing for a three-year delay in the court-ordered deadline to give rehabilitation programs time to work as an alternative to housing thousands of inmates in private prisons and county jails.
The judges warned that no further extensions were planned "absent extraordinary circumstances."
The Associated Press contributed to this report.