New manager Unai Emery is planning for the future and sees the Nigeria international featuring in his long-term plans.
Arsenal announced the news of the forward's contract renewal on Friday, along with a video of the elated youngster speaking of his love for Arsenal.
“It's always been my childhood dream to represent Arsenal, from young,” said Iwobi.
“To get an extended contract is an amazing feeling and I hope I'm doing the Arsenal family proud, as well as my family.
“I'm very pleased Alex has signed a new contract with us.”
Iwobi is expected to feature as the Gunners get their 2017-18 Premier League campaign under way against Pep Guardiola's Man City on August 12.
This article was most recently revised and updated 3 years ago