The 20-year-old penned his new deal on Friday evening in the presence of Barca president Joan Laporta and the club's Sporting Director Deco.
Casado has been a part of the famed La Masia Academy since 2016 when he arrived from CF Damm and has steadily progressed through the ranks.
The promising young talent has been a regular in Barca's reserve team for the past two years and was handed the captain's armband by manager Rafa Marquez at the start of the 2023-24 season.
Over the last two campaigns, Casado has played in a total of 66 games for Barca Atletic, starting 64 of them.
Casado set for Barca senior team action in 2024-25
Under Marquez, the Barcelona B coach helped develop the youngster into a more versatile player, capable of filling in as a makeshift defender and wing-back when necessary.
The midfielder has made just five senior team appearances in total but has been on the verge of breaking into the first-team setup for some time now, having made his debut back in 2022.
Casado's previous contract with the Catans was due to run out on June 30 this year, and while the club had the option to extend it by a further 12 months, they chose instead to negotiate a new deal with the Spaniard.
As it stands, there has been no confirmation of a release clause in the club's official statement, though given how highly they rate the player, it is likely that Barcelona will insert one
However, the lingering question now is how exactly Casado will fit into the Barcelona first team under the leadership of Hansi Flick.
Sport suggest that the 20-year-old could potentially feature as one-half of Flick's preferred double-pivot system, which the Barca boss used to excellent effect during his time in Bavaria.
Barcelona preparing for busy transfer window
Blaugrana have tied down several rising stars over the past year, including the likes of Alejandro Balde, Lamine Yamal, Pau Cubarsi and Hector Fort.
The Catalans have a busy summer ahead as they look to bolster their squad after finishing 10 points behind Real Madrid in La Liga last season.
Among the players who have been linked with a possible move to Camp Nou are Bayer Leverkusen's Jeremie Frimpong and Liverpool attacker Luis Diaz.
However, given the club's financial constraints, any significant signing will likely depend on existing player sales to ensure they adhere to FFP regulations.