Chelsea saw a bid for the Uruguay international rejected in August, with the 25-year-old now committing his future to the Portuguese champions.
Pereira, who still has a release clause of ?25.7million, was previously contracted until 2015.
A statement released by the club to the Portuguese stock market (CMVM) read: "The Football Club Porto informs the market of the extension to Alvaro Pereira's contract until June 2016. The release clause remains set at 30 million euros."
Source: Team Talk
Source: Team Talk