Ibrahimovic returned to the Rosonerri for a second spell in the second half of the 2019/2020 season and has been the club’s main source of goals despite his advancing years.
The 39-year-old, who recently made a comeback at international football with Sweden, has scored 15 goals in 17 Serie A games for second placed AC Milan.
"AC Milan has announced that the Club has extended Zlatan Ibrahimović's contract," a statement on the club's website read.
"AC Milan is the Club for which Zlatan has played the most in Italy. After scoring 84 goals in 130 appearances with the Rossoneri, the Swedish striker will continue to be wearing the red and black jersey next season."
Ibrahimovic has expressed delight after penning fresh terms with Stefano Pioli’s side.
'I feel really happy. I've been waiting for this day. I'm staying for another year. It's what matters and it's what's most important,' the former Ajax Amsterdam, Paris Saint Germain and Inter Milan striker said.
'I've always said that playing for AC Milan is like being at home. I am really happy with the way the club makes me feel, everyone that works here, my team-mates and the coach and the fans who I miss a lot in the stadium.'
'This is like being at home. I would stay for the rest of my life if I could, he added. 'From the very first day, working with coach [Stefano] Pioli has been really easy because he has the right mentality.
'He has this energy each day that transforms the team because he wants to get the most out of the team.
'I am really happy with how the club makes me feel.'
