The highly-rated winger had attracted the attention of Manchester United and Tottenham Hotspur but has pledged his future to the Eindhoven side, signing a four year deal
The 20-year-old winger is seen as the hottest prospect in Netherlands and a bright season in the Eredivisie was followed by an impressive World Cup campaign in Brazil and saw him attract the interest of Manchester United and Tottenham Hotspur.
As speculation grew over the youngster's future, PSV offered him a new contract to make him one of their highest earners and he has now signed a contract extension, tying him to the Eredivisie side until 2018.
"PSV have extended the contract of Memphis Depay until 2018," a statement on the club's website read.
Technical director Marcel Brands revealed the deal was a year in the making and spoke of his delight at securing the Netherlands international's signature.
"We have worked hard for one year behind the scenes to keep Memphis in Eindhoven this season," Brands said. "We are more than pleased that he enters this new commitment.
"The budget that was available for to bring in another winger has now been used to keep Memphis at PSV."
Depay, who is the top goalscorer in the Eredivisie after two games with four goals and one assist, says he hopes to improve further in Eindhoven.
"I want to develop myself in this team. Last season we have embarked on a path to success. I want to play for the titles and be important to the team.
"I am pleased that we have reached an agreement with the club."
PSV face reigning Eredivisie champions Ajax on Sunday at 16.45 CET.