Ederson joined City from Benfica last summer and his extension will keep him tied to the club until 2025.
“I’m delighted to sign my new contract,” he told the club’s official website.
“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!”