According to French outlet L’Equipe, the 26-year-old has agreed a new five-year deal with the La Liga Champions, keeping him at the club until the summer of 2030.
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Sporting director Deco is now understood to be finalising the terms of the deal after receving a ‘green light’ from Kounde’s camp.
The France international had been heavily linked with a move to Man City as Pep Guardiola steps up their pursuit of a replacement for Kyle Walker.
Kounde played a key role for Hansi Flick’s side as they won a domestic treble, popping up with four goals and providing eight assists in his 53 games across all competitions.