"Iwanted to announce that I have chosen to extend my contract at ParisSaint-Germain, and I am of course very happy. I am convinced that here I cancontinue to grow within a club that gives itself all the means to perform atthe highest level," the 23-year-old said in a club statement.
"I amalso very happy to be able to continue playing in France, the country where Iwas born, grew up and flourished."
Mbappe andclub president Nasser Al Khelaifi posed holding a "Mbappe 2025" PSGshirt before the last game of the Ligue 1 season against Metz as the crowderupted when Al Khelaifi broke the news at the Parc des Princes.
The Franceforward, whose current contract expires on June 30, had been widely tipped tojoin Real Madrid.
The23-year-old, one of the game"s finest talents who burst onto the scene as ateenager and helped France win the World Cup in 2018, was set to leave on afree transfer when his contract expired at the end of the season.
PSG signedMbappe from AS Monaco in 2017 in a deal reported to be about 180 million euros,making him the world"s second-most expensive signing after Neymar, who joinedPSG from Barcelona for 222 million euros.
Real"s bidto sign Mbappe last year was rejected by the Parisian club, who appearedprepared to lose him on a free transfer this year.
Reports lastyear claimed the Spanish champions had offered PSG as much as 200 million eurosfor the Frenchman.
PSG had nointention of selling their young talisman in their quest for Champions Leagueglory, but the French club fell well short this season when Real staged adramatic second-leg comeback in the last-16 to knock them out of thecompetition.
PSG had beenreinforced last year with the signing of Lionel Messi from Barcelona to addfirepower to a star-studded squad. But apart from reclaiming the Ligue 1 title,the French club failed to win any other trophies.
Mbappe,however, excelled individually, scoring 36 goals and providing 26 assists forPSG in all competitions this season.