The 38-year-old is reportedly set to earn around €7 million (£6m/$8m) over the course of the deal after shining in Serie A last season.
Zlatan Ibrahimovic has ended speculation linking him with a move away from AC Milan by signing a new one-year contract.
It has been reported the new deal, which will keep the 38-year-old at San Siro until the summer of 2021, will earn him around €7 million (£6m/$8m).
“AC Milan is pleased to announce that it has reached an agreement for the contract renewal of Zlatan Ibrahimovic, extending the partnership with the Rossoneri Club until 30 June 2021,” the club said in a statement.
The news comes as a boost for Milan, with the club looking to continue their recent resurgence under Stefano Pioli.
Milan rose to sixth with a stunning run of form which saw them win nine and draw three of their last 12 Serie A games, having floundered in mid-table for much of the season before that point.
Ibrahimovic’s role in their improvement was clear. The Rossoneri lost just twice in the league after his arrival from the LA Galaxy in January, as he scored 10 goals and provided five assists in 18 league appearances.
He had scored 53 goals in 58 appearances during his two seasons in MLS before opting to return to Milan after previously featuring for the club from 2010-12.
That form meant Milan were desperate to keep him, but uncertainty around the club meant that when the squad returned to training ahead of the new season, Ibrahimovic wasn’t among the group.
He had been waiting for a definite agreement over his contract, and will now return to training with the rest of the squad.
Ibrahimovic was reported to be likely to leave the club if Milan had gone ahead with plans to replace Pioli with former RB Leipzig manager Ralf Rangnick at the end of the season, but the club’s eventual U-turn – with Pioli instead receiving a new contract of his own – apparently helped convince the striker to stay.
Milan have already seen the likes of Suso, Pepe Reina, Lucas Biglia, Ricardo Rodriguez and Giacamo Bonaventura depart the club this summer.
The Italian side will begin their Europa League campaign on September 17 with AC Milan set to visit Shamrock Rovers as part of the competition’s second qualifying round.
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