The 29-year-old previously said in January that he preferred to stay at Parc des Princes, after being linked with a return to former club Barcelona last summer.
The confirmation of a new contract also follows comments from PSG sporting director Leonardo in March, where he revealed he hoped an extension could be secured.
Neymar joined PSG from Barcelona in 2017, in a record move of £ 200million.
Speaking to the club’s official website, Neymar said: “I am very happy to extend my contract with Paris until 2025.
“The truth is I’m very happy to be staying here for four more years, to be part of the club project, to try to win titles, to try to achieve our biggest dream which is the Champions League.
“So I’m happy to stay at the club, to be part of it and to extend my contract.
“The joy of being part of this team, of the team, of Paris Saint-Germain, of the club. And then, of course, the affinity I have with the club, with the work, with the players who are in the team today. , with an excellent trainer who will certainly help us even more.
“These things make you believe in the project even more. “
PSG have not been able to turn the domestic dominance of recent years into success on the European stage, but see Neymar as a big part of their attempts to win a first Champions League title.
Last season, under current Chelsea head coach Thomas Tuchel, the French team reached the Champions League final.
Mauricio Pochettino’s side withdrew in the semi-finals on Tuesday after a 4-1 loss to Manchester City.
Neymar is convinced the club are getting closer to their goal and will learn from their recent disappointments.
He added: “Of course my goal when I came to Paris Saint-Germain was to help Paris Saint-Germain to the top, among the best, and we are getting closer.
“We are gaining more and more experience to help us negotiate these types of matches, to know how to play in the Champions League.
“And Paris is on the right track, we are getting closer and closer to winning the Champions League. I’m sure we can do it. “
PSG head coach Pochettino added: “I think the renewal of Neymar’s contract clearly speaks to the ambitions of this club, not just for today or tomorrow, but for the future in the short, medium and long term. long term.
“It’s also important to make everyone understand that this club is working to always improve and to win, which is always the main goal, despite the fact that it is a difficult time for us. “