Soccer report says, 21-year-old, Santos who joined Barcelona in 2013, has spent the majority of his time with the Primera Division side in their B team.
He made just three appearances for the first team under manager Luis Enrique.
Real Betis were reportedly keen to sign the Brazil U20 international but Ernesto Valverde is said to be impressed with the young cente-back as he prepares the squad for their upcoming campaign.
With Santos' signing, 33-year-old Jeremy Mathieu, who has been linked with Greek Superleague champions Olympiacos, could see his time at Camp Nou coming to an end.
A statement from Barca read: "FC Barcelona have taken up the option to keep Marlon Santos at FC Barcelona for the next three seasons.
"The Brazilian is a key part of Gerard Lopez's Barca B team, having played 24 matches last campaign.
"His impressive displays led to him being called up to the first team by Luis Enrique, and was handed his debut in the Champions League against Celtic.
"He also featured in La Liga, filling in for Gerard Pique for the last two matches of the season and completing the full 90 minutes of each."