Upon retirement, 'Bala' as he is affectionately known (or Balaverde, The Green Bullet) will continue to work with the UCI WorldTour team on staff in a development/ambassador type role until 2024.
"I'm so happy with this extension," the Spaniard said. "Everyone knows the Movistar Team is home to me.
"I've always felt really loved and respected here, and I'm so happy to be able to stay with the team for the next two years. It gives me the calmness and confidence I need to keep working hard and enjoying bike racing.
"I will fight for new victories, as many as we can, and also help our team-mates to achieve big success wherever possible in the future."
Movistar manager Eusebio Unzué said the team was keen to keep a rider of Valverde's calibre close to the fold.
"We feel privileged to have enjoyed for so long the sporting and human quality of such a great man as Alejandro.
"He's brought us big success, of course, yet he's offered us many lessons even when he's not crossed the line first. His recovery in 2017 after such a serious injury in the Tour de France; his resilience to keep seeking for success after nearly two decades in the sport; and his affable character with everyone he's worked with or come across, make them an essential person for us, a leader in and out of the races.
"Hopefully he can continue to enjoy bike racing in these two years as he's done during his whole career."
Debuting in 2002, Valverde's legendary career was marred by a two-year ban in 2010-11 for his implication in the infamous Operation Puerto blood bag scandal.
Alejandro Valverde by the numbers:
Vuelta a España overall win (2009)
7 medals in the world championships -including gold in 2018
4 x UCI WorldTour individual titles (2006, 2008, 2014 & 2015; leader of the UCI World Ranking at the end of 2018
4 x Liège-Bastogne-Liège,
5 x Flèche Wallonne
3 x Volta a Catalunya,
2 x Critérium du Dauphiné
4 stages in the Tour de France -plus one GC podium finish, 3rd, in 2015
11 Vuelta stages and one in the Giro (GC podium, 3rd, in his only appearance, 2016)