Silva, who joined from Valencia in the summer of 2010, will be 33-years-old when this new deal expires.
The Spanish midfielder told mcfc.co.uk: "From the moment I joined the club four years ago it has felt like a second home to me.
“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.”
Silva has been instrumental since arriving at City.
In his very first season in the Premier League, David won three consecutive Player of the Month awards between October and December, and became an instant hit at the Eithad.
He has been just as effective ever since and will be remembered for his majestic performance when Man City whooped arch rivals Manchester United 6-1 at Old Trafford in 2011.
Here's a montage of Silva's immense skill and trickery that will fortunately bright up the Premier League for years to come:
