The Spain international’s previous terms were due to expire this summer, but a performance-related clause was activated to ensure his deal was automatically extended by a further 12 months.
Nevertheless Azpilicueta became a transfer target for Barcelona and direct negotiations have been taking place between the two sides.
Cesar Azpilicueta has signed a new two-year contract that will keep the right-back at Chelsea until June 2024, Goal Gazette understands.
But no agreement was reached and the 32-year-old has now put pen to paper at Chelsea, easing their need to recruit in that part of the pitch.
Sources at the club praise the leadership Azpilicueta has shown, particularly throughout the period when Chelsea were operating under sanctions and the subsequent change of ownership.
They highlight the commitment and professionalism he has displayed, despite persistent speculation around where he would be playing next season.
It is believed that new Chelsea co-owner Todd Boehly has been determined to retain Azpilicueta since taking over from Roman Abramovich, and that the defender’s family are settled in England.
He captained Chelsea to the Champions League title in 2021 and played an integral role in securing their first FIFA Club World Cup in February.
Azpilicueta has made 476 appearances since arriving from Marseille in 2012 and, during his decade in West London, won every single trophy possible in club competitions.