The goalkeeper has signed a new five-and-a-half year contract, committing him to the Potters until the summer of 2021.
The 23-year-old has been in stunning form this season - his first as City's first choice 'keeper - and is one of the most talked about home-grown players in the Premier League.
He is now established in the English senior squad and looks set to be a part of Roy Hodgson's plans for this summer's European Championships.
Chief Executive Tony Scholes said: "We are naturally delighted that a player of Jack's quality has signed a long-term contract.
"We've always held Jack in the very highest regard but he has exceeded even our expectations since Mark selected him as our first choice goalkeeper.
"As a Club we feel it's important that we tie down our talented young players on lengthy contracts and Jack's new deal is a fitting reward for his progress this season."
Butland is the third City star to pen a long-term deal this term. Giannelli Imbula signed a five-and-a-half year deal following his Club record £18.3million transfer in January, while last month Bojan signed a new four-and-a-half year deal.