The Belgium international has recently been linked with a move to Spanish giants Barcelona.
The 23-year-old’s previous deal was set to expire in 2012.
“There has been no speculation from my side because I have just signed the new deal, but it is the kind of thing you have to get used to when you play for this club now,” Kompany told the club’s official website.
“In the end you just don’t pay attention to the speculation. City’s ambitions are my ambitions and I want to be one of the main players in a very big team.
“We are now a mature side now and the big improvements this season have been in mentality and professionalism. That is why we are better than we were last season.
“It is so much more comfortable being in a squad where everyone is giving their all.”
