The Germany midfielder,Toni Kroos who joined the Madrid from Bayern Munich in 2014, had been linked with a Premier League move earlier this year.
He has become a mainstay of the Real midfield side, playing 108 games and scoring four goals. He has won the Champions League, World Club Cup and two European Super Cups.
Kroos was linked with a move to Manchester United and City in the summer.
However his newly signed contract has been officially announced by the club Real Madrid and will be addressing the media on Thursday at Santiago Bernabeu stadium.