The Spain international's previous contract ran until the end of this season, but Barca had the option to extend that by a further two years.
Fati has made a huge impact since making his senior debut in August 2019 and the Catalans have now tied the talented forward down to fresh terms.
As it did with Pedri, Barca has inserted a €1 billion release clause in the 18-year-old's deal.
Fati has broken a number of records since his emergence in 2019, including becoming Barca's youngest ever LaLiga goalscorer at the age of 16 years and 304 days.
Barca's number 10, which he inherited after Lionel Messi's move to Paris Saint-Germain, is also the youngest scorer in Champions League history thanks to his strike against Inter at San Siro a minute after being brought off the bench in December 2019.
The Bissau-born attacker's development was stunted by a near year-long lay-off, but he has scored two times in five appearances since returning to action last month.
Fati has netted 15 goals in 48 games for the LaLiga giants in total, a tally that is bettered only by Luis Suarez (21), Antoine Griezmann (35) and Messi (69) – none of whom are still at the club – since his debut 26 months ago.
He has scored from 11 of his 38 shots in LaLiga since February last year and has a conversion rate of 35.48 when excluding penalties.
That is the best return of any player to have scored more than five goals in the competition over that time, followed by Kevin Gameiro and Jorge Molina (both 33.33).
News of Fati's new contract comes a week on from Pedri penning a five-year extension at Camp Nou.