Silva arrived at City from Valencia in 2010, but will remain at the Etihad Stadium until 2019 after agreeing terms with the English champions.
Silva has been a pivotal figure for the club in helping them win the Premier League in 2012 and 2014, and the FA Cup in 2011.
"From the moment I joined the club four years ago, it has felt like a second home to me," said Silva.
“On and off the pitch, I feel incredibly content and fulfilled professionally and personally, so why wouldn’t I want to stay and keep winning trophies with this fantastic team?
“Over the last four years, we have achieved so much together, establishing City as a dominating force in England and now, when I look around this dressing room, I can see no reason why we won’t become one of the top teams in the world.
“It was a straightforward decision to extend my stay here and spend my peak years at Manchester City, a club with unbelievable fans who have always supported me.”
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