"Paris Saint-Germain are very pleased to announce that Marco Verratti has extended his contract for another year. He is therefore bound to the club until June 2018," read a statement on the club's official website.
"Arriving at Paris Saint-Germain in 2012, Marco Verratti has shown his desire to impress in his time with the club. The young Italy international has played 36 games, including nine in the Champions League last season.
"The extension shows the will of the Paris Saint-Germain to build a project for the future and to build one of the greatest teams in Europe."
The 20-year-old playmaker, who was a stand-out performer for Italy during the European Under-21 Championships this summer, had been linked with a switch to Old Trafford, with David Moyes on the lookout for midfield reinforcements.
United's new boss has so far been unsuccessful in his pursuit of Barcelona's Cesc Fabregas, and Verratti was viewed as a realistic alternative to the Spanish international.
But Manchester United have suffered yet another setback with news of Verratti's extension in what has proven to be a frustrating summer for the Old Trafford outfit to date.
So far, Moyes is yet to make any high-profile signings since replacing Sir Alex Ferguson at the helm, but continues to be linked with a double raid on his former club Everton, with Marouane Fellaini and Leighton Baines very much in his sights.
Other names mooted for a potential Old Trafford switch are Real Madrid's Luka Modric, whilst Thiago Alcantara snubbed Manchester United in favour of Bayern Munich earlier in the summer.