The Argentina defender has been in excellent form this season, missing just one of the Blues’ 23 Premier League games so far.
He has made 118 appearances since joining from Valencia with whom he spent just one season having previously been with Porto for four seasons.
Said I’ve enjoyed my time at City since the first day I arrived and I’m really happy to have extended my stay here by a couple more years.
“My only aim is to help the team and give all I can for this Club. I am learning every day under Pep and enjoying my football and I feel I can still improve as a player
“I’m a family man who enjoys being at home and I love living in Manchester, you sort of get hooked by it.
“It’s a very beautiful city and I’m very happy here.”
And Director of Football Txiki Begiristain added: “Nico is in excellent form and has been a vital part of the success we’ve had so far this season.
“He’s a tough, talented defender and fits in well with our playing style, we’re delighted he has extended his stay with us.”
Nico penned a five-year deal with City in 2015 and has become a firm fan favourite, particularly over the past year where he has been outstanding – plus added goals to his arsenal.
Having adapted to Pep Guardiola’s exciting brand of playing football from the back, the Argentinian, nicknamed ‘The General‘, now tops the Premier League completed passes list, with 2033 to date – almost 400 more than the next defender on the list.
At 29, Otamendi will be 34 by the time his new deal expires.
With 51 caps won for his country, he is almost certain to be a vital member of Argentina’s World Cup squad this summer, too.
His consistency during the current campaign led to a first Etihad Player of the Month award for December.