The centre-back's previous deal had been due to expire this summer, with suggestions that the 23-year-old would seek pastures new at the end of the 2013-14 campaign.
However, a statement on City's official website has revealed that the former Brussels youngster has committed his future to the Premier League champions.
"Dedryck Boyata has signed a new two year contract, keeping him at the club until 2016," read the statement.
"The Belgian defender has been with City since 2007 and he enjoyed a swift rise through the ranks, establishing himself as a crucial part of the side that won the FA Youth Cup in 2008 and subsequently going on to impress in the Elite Development Squad."
Boyata made just six first-team appearances last season.