The England defender, 19, still had more than three years to run on his previous deal but the club were desperate to secure the long-term future of one of the country's brightest prospects.
City chief executive Alistair Mackintosh is delighted with the news, telling City's official website: "It's absolutely tremendous news for the club.
"It's the longest deal, certainly in my memory, of the club's history. The manager's delighted, Dr Thaksin's delighted and I'm personally delighted.
"We've worked well with Micah and his father in putting together an appropriate deal.
"It's always been my goal to sign our young players up on long-term contracts to provide a solid foundation, going forward, as we continue to invest in the team."
City boss Sven-Goran Eriksson is also pleased with the development, adding: "This is fantastic news. It shows we are building for the future by securing one of our most talented players on the longest term contract."