The 22-year-old has put pen to paper on his new deal on which will see him now tied to the Basque outfit for another four seasons.
A statement from the club read: “Athletic Club and player Iker Muniain have signed a contract extension that will see the player remain with the club until June 30, 2019.
“His buy-out clause has been set at 45million euros.”
A youth product of Athletic, Muniain broke into the first team in 2009 at the age of 16 and was part of the Spain teams that won the Under-21 European Championships in 2011 and 2013.
Muniain made 25 league starts for Athletic this season before rupturing his anterior cruciate ligament in his left knee in April.
The Spain international was a target of Liverpool last summer.