Bailey, 21, joined Leverkusen in the winter of 2016/17 and made eight appearances in the second half of the season without scoring. But last year the lightning-fast winger dominated Bundesliga defences on his way to scoring nine goals and claiming six assists in 30 appearances.
"This contract extension is a show of appreciation for the support I've had and I've always said how happy I feel here in Leverkusen," Bailey said. "We can achieve a lot with this young team. My goal is to repay the trust shown in me with good performances and consistent development."
Watch: All of Leon Bailey's goals and assists in 2017/18!
The Kingston-born left-footer scored one of the Bundesliga’s goals of the season against Hoffenheim with a ridiculous back-heel.
Speaking to bundesliga.com after the club's opening game at Borussia Mönchengladbach, Bailey stated, "I feel good at the club. The players around me support me, the coaching staff and fans have been great to me and I feel an important person for the team."