The experienced defender has established himself as one of the top right-backs in the country in recent years.
His exploits have not gone unnoticed as he is a regular in the South Africa national team as the first-choice right-back.
Mkhize, who has attracted interest from Mamelodi Sundowns and overseas clubs, signed a three-year deal with the Citizens.
A club statement read: "Cape Town City FC are delighted to announce that Captain Thamsanqa Mkhize has signed a new three year deal with the club."
However, the former Maritzburg United player is pleased to have extended his stay with the Mother City-based side.
“I’m grateful to Cape Town City for giving me this opportunity. When I first arrived here I felt like I was at home,” Mkhize said.
The hard-working player had led City to their maiden MTN8 Cup last year and he was named the club's 2018/19 Player of the Season.
City made the announcement on their official Twitter page:
OFFICIAL| Cape Town City FC are delighted to announce that Captain Thamsanqa Mkhize has signed a new three year deal with the club pic.twitter.com/96jZJcDAp8— Cape Town City FC (@CapeTownCityFC) August 15, 2019