The 19-year-old has agreed a three-year extension, putting pen to paper on a deal which keeps him at the Etihad Stadium until the summer of 2026.
A technically gifted and versatile attacking player, McAtee joined City as an 11-year-old and progressed through the Academy ranks before making his first team debut earlier this season.
He follows in the footsteps of fellow Academy graduates Finley Burns, Liam Delap and Cole Palmer, who have all signed fresh terms since the summer, and is delighted to have committed his future to the Club.
“This is a really proud moment in my career, and I am so grateful to the Club for showing their faith in me,” he told mancity.com.
“I’ve been here since I was 11 and I can’t thank everyone enough for everything they have done for me.
“I have worked with some brilliant coaches in the Academy, who have put me in a position to be able to train and play with Pep Guardiola and the first team, which is all I’ve ever wanted to do.
“I’ve been really pleased with my progress this season and I am sure I am in the right place to keep improving, so it feels amazing to know I will be a Manchester City player for another four years.”
Comfortable in both midfield and attack, McAtee is widely regarded as a player of great potential and has trained with the first team throughout the 2021-22 campaign.
He made his debut as a 72nd minute substitute when City beat Wycombe Wanderers 6-1 in the Carabao Cup in September and has since added a further two senior appearances to his name.
The Salford-born youngster made his Premier League bow as a late substitute against Everton in November, before impressing in a 24-minute run out as Guardiola’s men eclipsed Swindon Town in the FA Cup third round earlier this month.
His development has been aided by regular game time with the Elite Development Squad, who he won the Premier League 2 with last season.
This campaign, under the guidance of Brian Barry-Murphy, he has scored 14 times in 15 league games to establish himself as the leading marksman in the division.
Everyone at Manchester City congratulates James on his new contract and wishes him the best of the luck over the coming years.