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The City academy graduate is a key first-team player for Pep Guardiola, who has started him in all nine Premier League games this season, with the England international scoring in his last three games, including a hat-trick against Manchester United.
Foden joined Man City's youth system aged nine and has won the PFA Young Player of the Year award for the past two seasons.
Foden says signing this new deal is "a dream come true".
"It's hard to put into words how happy I am to have signed this contract," he said.
"It's a dream come true.
"I have been a City fan all my life. I've trained here for so many years and I've even been a ballboy. I love this club so much, so to know I am going to be a part of it until 2027 feels amazing.
"I've improved a lot in recent years and so much of that is down to Pep and his staff, who guide me every single day on the training field. Working with them gives me the best chance of improving even more and becoming the best player I can be.
"With the squad we have here, I feel I can keep learning and winning trophies. Those are the two most important things to me.
"I want to thank every single person at City because without them I would not be where I am today. All the Academy coaches I worked with, all the players I've played with and everyone who works behind the scenes. It's an honour to be part of this football club."
More to follow...
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