Aguero has agreed a two-year contract extension to keep him at the Vicente Calderon until summer 2014.
The player told sergioaguero.com: "I want to say I am very happy to have renewed with Atletico Madrid.
"It is not only about putting a signature on a contract, it is also renewing my commitment to the club I joined when I was 18 and where I have been for almost five years. It has also renewed my desire to keep progressing with the club."
Atletico, who lie sixth in La Liga, started 2011 with a goalless draw at home to Racing Santander yesterday.