Lewis made 23 appearances last season after breaking into the Manchester City first team and topped it off with winners medals in the Premier League, FA Cup and UEFA Champions League.
The 18-year-old also started City's first game of this season against Burnley last Friday.
His previous contract was set to run out at the end of this season but he will be staying at the Etihad Stadium for the foreseeable future.
Speaking to Man City's official website about signing his new deal, Lewis said: "It's been an unbelievable year for me and now to sign this contract is a dream come true.
"As a City fan I can remember watching us winning trophies when I was young and it's the only place I've wanted to be.
"To know I'm going to be here until 2028 is fantastic and I can't wait to keep working and keep improving.
"Everyone at the club has been so amazing, starting with the academy where I learnt so much and I am hugely grateful for everything they did.
"The fans have been brilliant too and I'll give everything for them and the club to try to keep us being successful."
"It's amazing. For me, my family, it's a chance for me now to live my dream and work as hard as I can to, you know, continue to get better and do more for the club. So, yeah, I'm really proud.
"I've been given the chance to play in a team that has won the treble. And I'm being given a new contract at the club that I love and I've been at my whole life."
Director of football Txiki Begiristain continued: "Rico is a really intelligent footballer and is already a mature and reliable member of the squad.
"He absorbs every single piece of information Pep gives him, which for a player of his age is special.
"We are very proud to have watched his journey through the academy and to see him playing with such confidence in the first team.
"His energy and hunger around the squad is contagious and we believe he can help to bring more success in the coming years."
Lewis can add to his trophy collection at his boyhood club when Man City take on Sevilla in the UEFA Super Cup on Wednesday.
