The Argentina star was contracted to the Club until 2020 but has now penned an extension that will take him to 2021.
Having joined in 2011 from Atletico Madrid, the Blues’ all-time top scorer will have spent a decade with City when his new deal expires.
GALLERY: Sergio signing in pictures
IN NUMBERS: Sergio's stats and honours
With 204 goals in 299 appearances, Kun is set to continue breaking Club and Premier League records.
"I am happy for this additional year," Aguero told CityTV. "My idea was being here for 10 years. I’ve been here for seven years, it’s going to be 10 when the contract expires.
"Hopefully, that's going to happen. This was the main reason I signed."
Director of Football Txiki Begiristain added: “We are delighted that Sergio is extending his stay at Manchester City.
“He has been so important to this Club since his arrival in 2011 and he remains at the forefront of what we are want to achieve in the coming years.
“We are fortunate to have had one of the best strikers in the world at our Club for so many years and I’m sure our supporters will be thrilled with this news.”
Aguero has already scored five goals and assisted a further two in six games this season.
Everyone at City is delighted with the news and we all wish Sergio the best during the remainder of his time here.
A City career defined by goals
Aguero has scored 204 goals in 299 matches for City – more than any other player in our history.
His goal in the 4-2 win away at Napoli in November – his 178th for City - saw him overtake Eric Brook and become the Club’s greatest ever goalscorer. Brook’s record had stood for 78 years.
He has the best minutes-to-goal ratio in Premier League history (based on 50 goals or more scored). He has scored 146 at an average of a goal every 108 minutes – better than Thierry Henry’s record of 121.8 minutes per goal.
He has nine Premier League hat tricks, two behind Alan Shearer, the record holder.
Shearer, the all-time leading Premier League scorer with 260, said recently: “He is the best foreign player to ever play in the Premier League - a great centre-forward with no weaknesses.”
Aguero’s nine Premier League hat-tricks
2011: Man City 3-0 Wigan Athletic (2011)
2014: Man City 4-1 Tottenham (4 goals)
2015: Man City 6-0 QPR
2015: Man City 6-1 Newcastle (5 goals)
2016: Chelsea 0-3 Man City
2017: Watford 0-6 Man City
2018: Man City 3-1 Newcastle
2018: Man City 5-1 Leicester (4 goals)
2018: Man City 6-1 Huddersfield Town
Top overseas scorers in Premier League
Thierry Henry (France) — 175 goals in 258 games for Arsenal
Sergio Aguero (Argentina) — 146 goals in 211 games for Manchester City
Robin van Persie (Holland) — 144 goals in 280 games for Arsenal and Manchester United
Jimmy Floyd Hasselbaink (Holland) — 127 goals in 288 games for Leeds, Chelsea, Middlesbrough and Charlton
Robbie Keane (Ireland) — 126 goals in 349 games for Coventry, Leeds, Tottenham, Liverpool, West Ham and Aston Villa
Nicolas Anelka (France) — 125 goals in 364 games for Arsenal, Liverpool, Manchester City, Bolton, Chelsea and West Brom
Dwight Yorke (Trinidad and Tobago) — 123 goals in 375 games for Aston Villa, Manchester United, Blackburn, Birmingham City, Sunderland
Aguero – a lengthy honours list
Since his arrival in the summer of 2011, City have become England’s dominant force.
Aguero’s City silverware:
Premier League: 2012, 2014, 2018
League Cup: 2014, 2016, 2018
Community Shield: 2012, 2018
City Player of the Year: 2012, 2015
PFA Team of the Year: 2017/18
Five big Aguero goals
1. THAT goal v QPR, 2012
The most iconic Premier League goal of all-time. It sealed our first title in 44 years.
2. Winner v Bayern, 2014
With City drawing 2-2 in stoppage time and facing a group-stage Champions League exit, Aguero capitalised on a mistake in the Bayern defence and coolly slotted past Manuel Neuer to complete a sensational hat-trick. Brilliant.
3. Tight angle v Liverpool, 2013
A goal that defied geometry. Aguero rounded Pepe Reina on the side of the box near the corner flag and, without looking, scored from the tightest of angles. A moment of pure genius.
4. Volley v United, 2013
City ran riot against Manchester United, five games into the 2013/14 season. Aguero’s volley from Aleks Kolarov’s cross was emphatic and set the tone for one of the best derby performances in history.
5. League Cup final v Arsenal
The ball from Claudio Bravo was incredible – but Aguero still had plenty to do. He held off a challenge from Shkodran Mustafi, before controlling the ball with his chest and producing a deft lob over David Ospina.
2011-12: 30 goals in 48 appearances
2012-13: 17 goals in 40 appearances
2013-14: 28 goals in 34 appearances
2014-15: 32 goals in 42 appearances
2015-16: 29 goals in 44 appearances
2016-17: 33 goals in 45 appearances
2017-18: 30 goals in 39 appearances
2018-19: 5 goals in 7 appearances