The new deal will keep Neymar at the Camp Nou until the summer of 2021 and includes a buy-out clause for the last three years of the deal set at £210million.
Neymar had two years left on his previous deal with Barcelona.
Reports in the Spanish media on Thursday suggested that Manchester United were launching a move to sign him.
Neymar tweeted his happiness on Thursday night: “Very happy to continue living that dream! Long live Barca! Long live Catalonia!”