Ozil, 29, has agreed to remain at the club until 2021 and will earn £350,000 a week before tax, which makes him the best paid player in the Premier League.
It is more than double the £150,000 a week he previously earned, and ends months of speculation that he was planning on leaving the club on a free transfer at the end of the current season.
In a statement posted on his social media channels, Ozil wrote: “I am proud to announce: I signed that thing … three more years with Arsenal!
“It’s been one of the most important decisions of my footballing career and that’s why I had to think hard and talk with everyone who’s important to me… Good things take time.
“In the end I let my heart decide. As I always said, I feel at home here and I’m highly motivated to achieve big things in the next few years. Once a Gunner, always a Gunner!”
The 2006 World Cup winner joined Arsenal from Real Madrid in 2013 and has made a total of 179 appearances for the north London club.
He had been linked with a move to Manchester United but will now remain at The Emirates Stadium until he is 32.
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