Gibbs-White had two years left on his previous deal after joining Forest from Wolves in a move worth up to £42.5m in August 2022.
He has scored 18 goals and provided 28 assists in 118 games for the Reds, helping the club finish seventh last season and qualify for Europe.
“I’ve felt at home at Forest from the moment I arrived,” said Gibbs-White. “The support from the fans, my team-mates, and everyone around the club has been unbelievable.
“I believe in what we’re building here – and with the backing of [owner] Mr Marinakis and the enormous ambition he has, I want to be part of making something special. I’m excited for what’s to come.”
Forest owner Evangelos Marinakis said: “There was significant interest from various clubs, but we were determined to build our future with Morgan at the heart of it.
“I promised our fans we would not only compete, but grow stronger and stronger every season. Today is another big step in that journey.”
Earlier this month, sources told BBC Sport that Forest were furious at Tottenham’s conduct in their pursuit of the England international, and insisted the threat to take legal action was genuine.
Forest are understood to have insisted they had not given Spurs permission to speak to Gibbs-White, and were willing to go to any necessary lengths to prevent the transfer taking place.
Under Premier League rules, clubs are not allowed to talk to players under contract with another team unless they have permission.
Gibbs-White returned to pre-season training as normal despite the speculation and has played in friendly matches against Monaco and Fulham.
