The club announced the news via Twitter:
Bailey himself also confirmed there had been "concrete interest" in his services in an interview with Kicker (h/t Sky Sports News).
The 21-year-old moved to Germany in January of 2017 and exploded onto the scene last season, playing a phenomenal campaign for an exciting Leverkusen team. Here's a look at all of his goals and assists in the Bundesliga last year:
The youngster has exceptional speed, but his great talent goes far beyond his athletic gifts. Bailey is a great technician with quick feet and good vision, leading to plenty of assists last year. His passing is solid, and when he features on the left wing, his crossing becomes a major weapon.
A new contract doesn't completely rule out a transfer, but it's a sign Bailey is happy with Bayer and willing to stick around for the foreseeable future.
As reported by Goal's Ronan Murphy, his agent has said Bailey is willing to stay in Germany so he can qualify for the national team through residency at some point in the future, and that too complicates a transfer. Bailey is ineligible to play for England, and if he transfers to the Premier League before that time, he won't be able to play for Die Mannschaft, either.