The 49-year-old’s previous deal was due to expire at the end of this season.
Guardiola joined the Citizens in the summer of 2016 and he has won two Premier League titles, three League Cups, one FA Cup and two Community Shield trophies. However, the furthest Man City have gone in the Champions League under his tutelage is the quarterfinals.
The former Bayern Munich manager had been linked with a return to Barcelona but this new deal puts to bed any lingering doubts about his future in the blue half of Manchester.
"Ever since I arrived at Manchester City I have been made to feel so welcome in the club and in the city itself - from the players, the staff, the supporters, the people of Manchester and the chairman and owner," Guardiola said.
"Since then we have achieved a great deal together, scored goals, won games and trophies, and we are all very proud of that success.
"Having that kind of support is the best thing any manager can have. I have everything I could possibly want to do my job well and I am humbled by the confidence the owner, chairman, Ferran [Soriano] and Txiki [Begiristain] have shown in me to continue for two more years after this season.
"The challenge for us is to continue improving and evolving, and I am very excited about helping Manchester City do that."
Having lost their Premier League crown to Liverpool last season, Guardiola will be hoping to guide Man City back to the top this term.
Man City are currently 10th on the league table but have a game in hand.
