The 22-year-old attacking midfielder's new deal will keep him at the Nou Camp until 30 June, 2020.
A statement from the defending European champions read: "An agreement has been reached with Rafael Alcantara, 'Rafinha', to extend his contract until 30 June 2020.
"His buyout clause has been set at 75 million euros, and the new contract will be signed over the next few days."
Rafinha came up through the ranks of Barca and joined the club's first team in May 2014 following a successful season on loan at Celta Vigo.
He made just 21 starts in all competitions for the Blaugrana last season.
Rafinha made his Brazil debut last month.
He is currently sidelined until March after tearing his anterior cruciate ligament in his right knee during a Champions League game at Roma.
ends
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