Just days after midfielder Ryan Giggs signed a one year contract extension, Neville has put pen to apaper on a contract that ties him to the club until June 2010.
"Manchester United is the only club I have ever wanted to play for so I am delighted to have signed for another year," he told the official Manchester United website.
Neville, 34, has spent the whole of his 17-year career at Old Trafford.