Nico Williams has signed a new contract with Athletic Bilbao to run until 2035, after his prospective move to Barcelona broke down over the Blaugrana's registration issues.

Williams, who played a key role as Spain won their record-breaking fourth European Championship in 2024, had long been mooted as a top target for Barca.

The left winger, whose older brother Inaki plays on the opposite flank for Bilbao, registered 18 goal involvements in all competitions last season (11 goals, eight assists).

Last month, Barcelona sporting director Deco confirmed the club were interested in Williams, which prompted Bilbao to question whether the Blaugrana could afford him.

Williams' previous contract had a €58m release clause, but Barcelona have been beset by financial issues in recent years and were initially banned from registering Dani Olmo and Pau Victor when they signed the duo last season.

Athletic claimed Barcelona would fall foul of LaLiga's financial fair play rules if they activated Williams' release clause, and the transfer has now fallen through.

Instead, in a stunning U-turn, Williams has penned a new contract to run until 2035, an eight-year extension on his previous deal, which was due to expire in 2027.

Williams' new contract contains a release clause the club described as a 50% increase on the previous figure – making it at least €87m.

In a statement, Bilbao said: "Athletic's sporting philosophy, freely chosen, is a singularity that makes the club and its fans proud. 

"The step forward that Nico Williams has taken with this renewal fills the entire athletic family with pride and draws a future as ambitious as it is exciting.

"This new show of loyalty marks a milestone in the history of the red-and-whites. His step forward in the face of the dizzying offers is a resounding success for Athletic Club, a full-fledged Athletic WIN.

"Ambitious Lions who not only want to win, but also want to do it with Athletic, with the team of their heart, are aware that in sport, the greater the difficulty, the greater the merit of victory."

Williams added: "When decisions have to be made, for me, what weighs more is the heart. I am where I want to be, with my family. This is my home. Aupa Athletic!"

Athletic begin their 2025-26 campaign against Sevilla on August 17, with their first meeting with Barcelona scheduled for late November at Camp Nou.