“FC Barcelona and the player Ousmane Dembele have reached an agreement for a contract until 30 June 2024,” said a statement on the club website.
The announcement brings an end to a six month soap opera about where the 25-year-old would be playing his football next season.
The Catalans were keen to keep a player who seemed revitalised following the appointment of Xavi Hernandez as coach at the Camp Nou but talks appeared to break down.
In January, Xavi warned Dembele that he had to “extend” his contract or “leave” the club but the French player warned he would not “give in to blackmail”.
Last month, Sports daily Marca described the negotiations as a “dialogue between the deaf”.
Paris Saint-Germain were strongly linked with a move to bring the former Rennes star back to France.
According to the press, Dembele, who joined Barcelona in 2017 from Borussia Dortmund, agreed to lower his salary expectations to fit in with a club that remains in economic difficulties.
Barca, meanwhile, were able to move closer to his wage demands thanks to the 207.5 million euro ($207.5 million) sale of 10 percent of its audiovisual rights to the American company Sixth Street. The club is, moreover, about to sell another 15 percent for 330 million euros.
With the arrivals of Franck Kessie, Andreas Christensen and Raphinha, the resolution of the Dembele affair marks the fourth good catch for the Catalans this summer.