Olmo's deal with the German Cup holders was due to expire in 2024. 

The 25-year-old's extension is a coup for Leipzig, with Olmo attracting attention from several large clubs in Germany and abroad. 

They play Eintracht Frankfurt in the German Cup final on Saturday in Berlin.

"When I came to Leipzig more than three years ago, it was a big step for me as a young talent in a top European league" Olmo said in a statement.

"Everyone here made it very easy for me, I was able to perform straight away. 

"RB Leipzig is a fantastic club in a fantastic city with fantastic fans -- and I'm really happy about the contract extension," he added.

Spanish media claim the forward has had an exit clause of 60 million euros ($64 million) inserted into his contract, similar to that of teammate Christopher Nkunku. 

The clause is set to kick in after next season.

A product of the Barca youth setup, Olmo came to Leipzig via Dinamo Zagreb, where he played from 2014 to 2020. 

Olmo has scored 21 goals and assisted 29 in 122 games in all competitions for Leipzig.