The 26-year-old had been linked with a move to Manchester United, with reports suggesting he was a key target in the club’s midfield rebuild.
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However, Tchouameni has opted to remain in Spain and commit his long-term future to the European giants.
The French international joined Real Madrid from AS Monaco in a €100 million move in 2022 and has since become an important figure in the squad.
His new contract is expected to run until 2031, keeping him alongside fellow French stars Ferland Mendy, Ibrahima Konate, Eduardo Camavinga and Kylian Mbappe.