The new four-year deal will keep the 22-year-old at the Nou Camp until the summer of 2020.
A statement from Barcelona read: “An agreement has been reached with Rafael Alcantara, ‘Rafinha’, to extend his contract until 30 June 2020.
“His buyout clause has been set at 75m (£54m) euros, and the new contract will be signed over the next few days.”
Rafinha is currently out of action with a cruciate ligament injury.
The Brazil international will be out of action until March after tearing his cruciate ligament during a clash at Roma.