Fuel duty has been held at 57.95p per litre since the March 2011 Budget.
In his Autumn Statement, Mr Hammond also revealed plans for investment in transport, including £1.1bn for English local networks.
And he pledged £390m for work on low emission vehicles and the development of connected autonomous vehicles.
Fuel duty remains the biggest component of the price of diesel and petrol. Motorists also pay 20% value added tax on those fuels.
It was last increased in January 2011 from 58.19p to 58.95p a litre and cut by a penny in the Budget two months later.
Mr Hammond said: "This will save the average car driver £130 a year and the average van driver £350 a year.
"It is a tax cut worth £850m next year and means the current freeze is the longest for 40 years."
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Drivers could also find their journey times cut after the chancellor announced investment of £220m to "address traffic pinch points on strategic roads".
He also promised £110m for an Oxford to Cambridge Expressway as well as East West Rail to create "a transformational tech-corridor" to link "the world-class research strengths of our two best-known universities".
In addition, the government will invest £450m to trial digital signalling on the railways to "achieve a step change in reliability and to squeeze more capacity out of our existing rail infrastructure".
Mr Hammond added: "Reliable transport networks are essential to growth and productivity so this Autumn Statement commits significant additional funding to keep Britain moving now and to invest in the transport networks and vehicles of the future."
He said the money for low emission vehicles would "build on our competitive advantage" in the field.
The chancellor added that the Department for Transport would continue to work with Transport for the North to develop detailed options for the Northern Powerhouse rail system.
Next year's planned rise in fuel duty has been cancelled by Chancellor Philip Hammond - the seventh successive year that the tax has been frozen.