This is a second fresh deal in six months for the Academy product.BCFC
Manager Garry Monk has moved to secure the defender's future, with a second fresh deal in six months.
In February Harding signed a two-year contract, which was to be effective from 1 July.
But this is a longer agreement, until June 2022, and replaces the contract that was negotiated just after the turn of the year.
Harding made his senior debut as a substitute in the Carabao Cup in August.
But it was during back end of the 2017-18 campaign when he really came into his own and impressed Monk.
Harding was handed his first league appearance by Monk in February in a vital match against Hull City, which Blues won 3-0.
He then kept the right-back berth, despite Carl Jenkinson being on loan from Arsenal (Maxime Colin moved to left-back to cover Jonathan Grounds' injury) and went from strength to strength.
The 21-year-old kept EFL Championship Player of the Season Ryan Sessegnon quiet in the must-win final match of the campaign against Fulham and provided the cross for the opening goal, stuck away by Lukas Jutkiewicz.
Academy product Harding was 24 hours later named Blues Young Player of the Season.