Guardiola was due to be out of contract at the end of this season and it had been suggested the Spaniard might be ready to leave City.
Revealing this, Manchester City in a statement on its club website said, "we are pleased to announce that Pep Guardiola has signed a new two-year deal with the club".
The 49-year-old has now agreed to stay at the Etihad Stadium until at least 2023.
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