The 21-year-old has made 88 appearances for the club after joining from Italian side Pescara in July 2012 and won back-to-back league titles since his arrival.
"When I think about my career, I only see myself at Paris Saint-Germain," Verratti said in a club statement. "I want to continue winning trophies with this club and continue to improve as a footballer alongside truly world-class players."
It is the second consecutive year that the Italian has signed an improved deal with PSG and president Nasser Al-Khelaifi expressed his happiness at staving off interest from other clubs to secure Verratti's services for even longer.
"All of Europe wants Marco Verratti, and each year, he shows his desire to be a long term part of the Paris St Germain project," Al-Khelaifi said.
"Marco is one of the most talented players of his generation. His presence in the squad shows the club's desire to prepare for the future and build one of the biggest clubs in Europe."
(Reporting By Sam Holden, editing by Alan Baldwin)
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