The defender has already spent nine years at Santiago Bernabeu having signed from Sevilla in 2005.
He has made over 400 appearances for Real in that time and collected numerous major honours.
The latest of those arrived on Saturday as Ramos played a leading role in the securing of a 10th European crown.
His efforts in the latter stages of a successful UEFA Champions League campaign carried Real to the title, with vital goals netted in a semi-final showdown with Bayern Munich and a 4-1 final victory over city rivals Atletico Madrid.
As Real continue to bask in the glory of that triumph, Ramos has sought to bring an end to any lingering concerns regarding his future.
The 28-year-old has been strongly linked with a move to the Premier League in the recent past, but he has no intention of quitting the newly-crowned continental kings.
Ramos said: "I feel privileged to participate in the world's best team.
"I hope to be here for many years and retire here.
"From the first day, I noticed the affection of the fans and I will always be grateful.
"It's a dream fulfilled."