Manchester City exercised a buy-back option to sign Angelino from Dutch Eredivisie outfit PSV Eindhoven before the start of the 2019/2020 season.
Angelino made 13 appearances in all competitions for the Cityzens before he was shipped out on loan to Germany for the second half of the season.
The 23-year-old Spaniard enjoyed his time with Julian Nagelsmann’s men, making 18 appearances in all competitions and scoring one goal to help Leipzig finish third in the Bundesliga before making it all the way to the UEFA Champions League semi-finals for the first time in their history, only to lose 3-0 to France champions Paris Saint Germain.
Leipzig have the option to sign Angelino permanently at the end of his second loan spell at the club.
"I'm very happy that I'm staying in Leipzig and that we can continue our journey together," said Angelino.
"The first six months with RBL were great; I had a lot of playing time from the start, I like the way the coach and the team approach the game. We also had a strong season in the Bundesliga and the Champions League.
"I'm looking forward to the future and many more successful moments."
Leipzig sporting director Markus Krosche added: "Angel needed little time to get used to our game and found his way around our approach right from the start.
"He played a strong second half of the season and helped us achieve our goals at the Champions League level.
"We are therefore very happy he will now wear the RB Leipzig jersey for at least one more season."
