The 19-year-old’s new deal will include a buyout clause set at one billion euros (£865m).
The Spanish international will officially sign the contract at a ceremony on Thursday with president Joan Laporta.
A club statement read: “FC Barcelona and the player Alejandro Balde have reached an agreement on a new contract that will take the player until June 30, 2028.
“The buyout clause is set at 1 billion euros.”
Balde, a product of the club’s youth set-up, has established himself as the first-choice left-back for the LaLiga champions over the past year.