The France left-back was being linked with a return to Ligue 1 this summer.
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However, Villa have announced Digne has now penned a new contract to 2028.
Digne joined Villa in the January 2022 transfer window from Everton and has gone on to make over 100 appearances in claret and blue.
He started his career with Lille before going on to represent Barcelona, AS Roma and Paris Saint-Germain.