The Iceland international says that he is happy at the club and is looking forward to the next four years having enjoyed a fine individual campaign in South Wales in 2015/16.
Sigurdsson, 26, was being linked with a possible summer shift to Everton but is thrilled to lay his roots at the Liberty Stadium for the foreseeable future.
"I am very happy. It's a place I like to live and play football in, so I'm very happy to have a new four-year contract," said Sigurdsson on the club's official website.
"It says a lot about what the club think of me.
"The main reason is that I'm very happy playing football here. I feel very good and it's a great team with a great bunch of lads.
"With the training ground extension being finished at Fairwood and the facility in Landore, the club is moving in the right direction and it's something I want to be a part of.
"At the end of last season we were getting better and where we should be. We were winning games, which was a lot better than the first half of last year.
"We've been discussing the contract for a long period of time. It slowed down a little with the takeover, so it took longer than expected.
"We had the Euros as well, of course, so I was away for five or six weeks, so it's nice that it's finally done and I can concentrate on football and get ready for the season.
"I am looking forward to the next four years here."