Mancini won the Premier League trophy at City for the first time in 44 years last year, after pipping Manchester rival United to the post.
"I am delighted to be able to give all of my efforts to Man City for a further five years," Mancini said in a declaration. "The opportunity which exists to build on our recent success is enormous."
Mancini has an impressive win rate of 60 percent at this team, and has been rewarded by the club's rich man owners. The deal will see the Italian add to his three years in charge and remain at the club until 2017.
"Roberto’s managerial credentials have been well proven in Europa for many years and in leading a team which has won the FA Cup and an unforgettable England Premier League title in successive seasons, his ability to manage in the English domestic game is also undisputed," City's interim chief executive officer John MacBeath said.
"This new agreement allows Roberto to focus on the challenge of guiding a team which is capable not only of defending the Premier League title, but one which can compete for European honors."
Contract talks were initially put on ice until the summer, as the Abu Dhabi owners waited to assess City's progress. The contract deal has ended speculation that saw Mancini strongly linked to several Russian clubs.
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