The Spain international, who arrived at the Etihad from Valencia, has committed himself to the current Premier League champions until 2019
The Spain international has commited himself to the club until the age of 33, having already spent four successful seasons at the Etihad following his move from Valencia after the 2010 World Cup.
Silva told City's official website: "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."