The 29-year-old Brazilian goalkeeper has put pen to paper on a contract that will keep him with the Spanish club for another five years
The Brazilian joined from Almeria ahead of the 2011-12 campaign and his previous deal had been set to expire in 2015.
And the 29-year-old has now agreed to extend his stay at Mestalla for an additional four years.
"Valencia CF are pleased to announce the reaching of an agreement with goalkeeper Diego Alves to extend his contract at the club through to June 30th 2019," read a statement on Valencia's official website.
"Diego Alves ... participated in a total of 35 games in the most recent campaign.
"He was chosen by fans on the club's official social networks as the best player of the 2013-14 season."
Last week, Valencia appointed Nuno Espirito Santo as their head coach after the club's new board opted to part company with previous boss Juan Antonio Pizzi.
"My first contract was for four years and I knew that if I did well, I could get a renewal," said Alves.
"I think it comes from the three years I’ve had here, the fans have always been really good with me and they’ve supported me. That has helped me adapt. I feel very happy here and from there, that makes everything easier for me."