Dembele extended his five-year stay at Camp Nou by signing a two-year contract, bringing to an end months of uncertainty surrounding his future.
Barca told him to find a new club in January after failing to strike an agreement over a renewal. They even left him out of the squad for two matches and threatened that he would be banished to the stands for the rest of the season if he stayed without signing a new contract.
However, coach Xavi Hernandez, who has always maintained he wanted the French winger to stay, brought him back into the side in February despite opposition from within the club.
Dembele, 25, who was initially jeered by supporters upon his return, went on to play a key role as Barca climbed from ninth to second in LaLiga, ending the campaign with a league-high 13 assists.
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"Today is a very happy day," he said. "I've had difficult years because of injuries but this is another time. My first option was to stay. It [negotiations] has been long but we are all happy and I can't wait for the season to start to help.
"The aim is to win titles, the dream is the Champions League and I'm going to give my all to win this title. I'm going to work hard and I hope it's a very good year for me and for Barca."
Barca president Joan Laporta added: "Ousmane has a special talent, he is a different player. [Barca coach] Xavi wants him and so does the club, it's an emotional day. I have an admiration for Ousmane as a player and as a person. He's always wanted to stay and he has made an effort to adapt to new wage structure at Barca."
Paris Saint-Germain and Chelsea had been strongly linked with signing Dembele, who technically became a free agent this month, but sources close to the player have always said staying at Barca was his first option.
Despite that, agreeing on the terms of a new deal had previously proved impossible, with Barca's sporting director Mateu Alemany and Dembele's agent Moussa Sissoko unable to reach a compromise.
There was a breakthrough in recent days, though, and Dembele has finally agreed to commit his future to Barca for the next two years ahead of rejoining preseason training this week.
Barca confirmed on Wednesday they reached an "agreement in principle" with Leeds over the transfer.
Any incomings at Camp Nou remain dependent on Barca selling another 15% stake in their domestic television rights. They sold 10% to global investment firm Sixth Street for over €200m on Thursday to cover losses across the 2021-22 campaign.