Savic, who has won the Europa League and the Super Cup with Atletico, current contract was expected to expire in 2023.
The former Manchester City defender has established himself as a key assest at the heart of defence for the LaLiga champions since arriving.
Savic made his maiden appearance for Atletico on September 22, 2015 in a 2-0 victory over Getafe.
The 30-year-old has gone on to feature 202 times, with 117 wins alongside 3 goals.
The defender played 42 times in all competitions in 2020-21 season as he started 33 league games out of 38, helping Los Colchoneros to a first LaLiga title for the second time in seven years.
The Madrid based-club confirmed the news on their official website with a statement which reads;
"Atlético de Madrid are delighted to announce that Stefan Savic has renewed his contract for a further season – until June 30, 2024. The Montenegrin joined our club in 2015 and has been a key player ever since."
Atletico Madrid will begin their title defence away at Celta Vigo on August 15.
Savic joined Atletico Madrid from Fiorentina for €10 million fee and signed a five-year contract with the club.
The experienced defender helped Atletico to earn more clean sheets which was one of the key factors for their league triumph.
And with Diego Simone not ready to lose him to any other club, the Argentine manager has been able to tie down the Montenegrin at the club.
