Gvardiol has established himself as one of the Premier League's top defenders in recent years, attracting the attention of top clubs such as Real Madrid.
The 24-year-old suffered a serious right tibia (shinbone) fracture during City's 1-1 Premier League draw with Chelsea on the 4th January 2026, but returned in the closing weeks of the campaign and featured for Croatia at the World Cup.
Gvardiol follows Abdukodir Khusanov, who also agreed a contract extension this week as City locked down several players during the summer transfer window.
Speaking on the new deal, the Croatian revealed that he had zero hesitation over putting pen to paper.
"As soon as I knew City wanted to renew my contract, I felt straight away it was what I wanted.
"The City fans have been unbelievable with me from day one - and the club provide absolutely everything for players. It’s the best club in the world to be at.
"I have felt so much love and respect during my three years here, and I don’t take that for granted.
"The players we have here are amazing. This is a world-class squad that is young and full of potential. I truly believe we will have a lot of success in the coming years."
City director of football Hugo Viana added: "Josko is already one of the best defenders in the world. Manchester City are committed to keeping our best talent, which is why we are so pleased this contract has been agreed."
Gvardiol is now preparing for life after legendary manager Pep Guardiola departed, as Enzo Maresca takes charge of the club in the coming campaign.