The versatile 29-year-old Spanish player was news that Chelsea and Manchester United Wall are waiting for his signing. A possible move from Spain.
But Real Madrid acknowledged that the Spaniards put a new long-term deal on paper at Bernabeu.
"Real Madrid CF and Lucas Vázquez have agreed to extend player contract" Read a statement from the team
He is the second player to extend his Los Blancos contract only after the Croatian playmaker Luka Modric
More crucially, Lucas Vasquez filled in on his right back until breaking his cruciate ligament against Barcelona in April.
He played an important role in Real Madrid's triumph over Liverpool in the UEFA Champions League quarterfinals, won by Real Madrid.
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