Dortmund extend deal with in-demand Nmecha until 2030
German tabloid Bild said the Germany midfielder would have improved terms under the new deal.
"I am very grateful for the club's trust. I want to repay that trust by giving my best for Borussia Dortmund," Nmecha said in a statement.
Nmecha, 25, came through the Manchester City academy before moving to Wolfsburg in 2021. He joined Dortmund two years later for a reported fee of 30 million euros ($34 million).
Having improved under coach Niko Kovac, who also managed him at Wolfsburg, Nmecha reportedly attracted the attention of several Premier League clubs, including a potential return to City.
Nmecha has scored 13 goals in 108 matches for Dortmund. He has played six times for Germany, scoring once.
Sporting director Sebastian Kehl said Nmecha is "extremely valuable to us in the center of the pitch, and he always finds creative solutions, even under pressure.
"He brings incredible quality to the field – both for us and for the German national team."
The extension is a boost for Dortmund amid an inconsistent season.
Despite one of their best league campaigns in recent years, Dortmund sit well behind leaders Bayern Munich and have already crashed out of both the Champions League and the German Cup.
Alongside captain and centre-back Nico Schlotterbeck, Nmecha is among Dortmund's most promising players and has made himself key to the team's midfield under Kovac.