The 21-year-old moved to the west London club from Belgium outfit Anderlecht in 2012. After spending three years with the Blues' academy, he struggled to break into the first team at Chelsea.
Musonda was allowed to join Real Betis on loan in January 2016. The loan deal was extended for one more season the same summer. However, the deal was terminated and the player returned to his parent club at the start of this year.
He made his Premier League debut in Chelsea's opening match of the season. Musonda made his full debut in Chelsea's 5-1 win over Nottingham Forest in the Carabao Cup in September. The Belgium attacker has now signed an extension and the new deal will keep him at Chelsea until 2022.
The player expressed his delight after securing his future at Chelsea. Musonda, who can play as a number 10 or the wide positions has now set his sights on cementing a place in Antonio Conte's starting lineup.
"I am very happy and very proud. I came here very young and am very happy to continue my journey here. I love this club so it's a great moment for me and my family. Now I want to establish myself and progress into the team and stay here permanently," Musonda told Chelsea's official website.
Chelsea director Marina Granovskaia has expressed her delight after the Belgian put pen to paper. She also remains hopeful Musonda can be a "success" in the future.
"We are very happy Charly has committed his future to the club. He is an exciting talent who we believe can develop into an important first-team player and we hope he will be a part of Chelsea's successes for a long time to come," Granovskaia said.