The 29-year-old Uruguay striker’s new deal, which had been in the pipeline for some time, features a 200 million-euro (£167 million, $208 million) release clause.
Barcelona said Suarez, who has scored 97 goals in 116 appearances since signing from Liverpool in 2014,will officially pen the new deal on Friday.
The former Ajax striker helped Barca win a treble of La Liga, Copa del Rey and Champions League in his first season at the Camp Nou and followed that up with a domestic double last season.
His remarkable goal tally of 59 goals in 53 matches last season, including 40 in La Liga, saw him win the European Golden Shoe award for Europe’s top scorer.
Suarez’s new deal follows the announcement by Barcelona in October that Brazilian superstar Neymar had signed a new five-year deal also keeping him at the club until 2021 and featuring a 250 million-euro buyout clause.
Barca coach Luis Enrique recently expressed confidence that Lionel Messi would tie his future to theclub after opening talks to extend his contract beyond 2018.