The 25-year-old midfielder’s future was reportedly uncertain following Arsene Wenger’s exit but the Gunners’ new head coach has indicated Xhaka will take a central role.
The Switzerland international has signed a “long-term” deal, according to the club, and said: “I am happy and proud to sign a new contract for Arsenal and I hope for good results in the future.”
And Wenger’s successor Emery said: “I’m delighted. He’s an important member of the squad and is still young so will be able to develop even more.
“I hope he has a successful World Cup with Switzerland and comes back fit and ready for the new season.”
Xhaka started 37 out of 38 Premier League matches last season but was sent off in home games against Swansea and Burnley.
He has been joined by Switzerland team-mate Stefan Lichtsteiner at the Emirates this summer, and the ex-Juventus right-back said: “I’ve known Granit now for more than six or seven years, he’s just an amazing player,
“Off the pitch he is just a great person, a great character, very calm – he knows when he can joke and he knows when to concentrate. A top professional player on the pitch, great passing and just a great player.”