The Villa captain had been tipped for a move to Old Trafford but now commits his future to his boyhood club in a deal worth a reported £140,000 per week.
Grealish said: “I am delighted to make this commitment to Villa. It is my club, my home and I am very happy here.
“The owners have made it very clear to me how ambitious they are and how they want to build Aston Villa.
“There are exciting times ahead and I am very glad to be part of it.”
Grealish has only recently been rewarded for his fine form at club level with his first international call-up, where he made his England debut against Denmark.
United had made Grealish one of their top targets this summer with Villa slapping an £80million price tag on their talisman.
The 25-year-old is key to Villa’s hopes of staying in the Premier League again this season and his decision to stay is a huge boost for the midlands club.
Last season the midfielder made 41 appearances for Villa, scoring 10 goals including one on the final day that helped to ensure the club’s top-flight safety.
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Villa CEO Christian Pu