The 29-year-old previously stated in January that it was his preference to remain at the Parc des Princes, having been linked with a return to former club Barcelona last summer.
The confirmation of a new contract also follows comments made by PSG sporting director Leonardo in March, where he revealed he was hopeful that an extension could be reached.
Neymar joined PSG from Barcelona in 2017 in a world record £200m move.
Speaking to the club’s official website, Neymar said, “I am very happy to be extending my contract with Paris until 2025.
“The truth is that I am very happy to be here for another four years, to be part of the club’s project, to try to win titles, to try to achieve our biggest dream, which is the Champions League.”
“So I am very happy to stay at the club, to be part of it and to extend my contract.”