Facey had originally been on loan from Manchester City FC’s Elite Development Squad until 30 June.
“I’m really excited to be staying in New York,” Facey said. “It gives me a chance to keep learning and continue playing first-team football at a really high level. This is a fantastic place to be, the fans are incredible and it feels like we are building something very special.”
The 20-year-old center-back has made nine appearances for New York City FC this season and has started the last five matches - seven in total this campaign.
“I couldn’t be more pleased that Shay will continue to be an integral part of our club for the remainder of the season,” head coach Jason Kreis said.
“Shay has put in some really strong performances, especially in the last three or four games; he’s a young player and it's testament to his talent that he’s adjusted so quickly to MLS”.
New York City FC, on a current three-game winning streak having suffered just one loss in the last six matches.