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The Brazilian arrived at the Etihad from Benfica last summer and enjoyed a wonderful debut campaign, keeping 21 clean sheets and receiving a nomination for the coveted PFA Young Player of the Year award.
His new agreement is reward for his superb performances and he has set his sights on more success with the Blues.
Ederson told CityTV: “I’m delighted to sign my new contract.
“It means that the Club is happy with my work, they trust me, and I hope to meet their expectations on the pitch and bring a lot of joy to the fans.
“I want to win everything we can! All of the competitions, but for me the Champions League is without a doubt a very special competition for us, and it is my dream to win it in Manchester City’s shirt!
Watch: Ederson's CityTV interview
Director of Football Txiki Begiristain added: “Ederson has shown in his first season at the Club that he has all the attributes needed to become one of the best goalkeepers in the world.
“He has outstanding quality and his ability with the ball sets him apart from his competitors. We are really looking forward to seeing him develop at City over the coming years.”
Still only 24, Ederson is widely viewed as one of the world’s top goalkeepers and his arrival at City has helped revolutionise our style of play, with his distribution and calmness in possession bringing a new dimension to the side.
Everyone at City is delighted he has put pen to paper on a new deal and we all wish him well for the future.
The Belgian provided the assist – his 16th of the Premier League campaign – for Gabriel Jesus to snatch all three points at St Mary’s, ensuring the Blues completed a remarkable campaign with a record-breaking 100 points.