The stopper, son of former Norwich City keeper Bryan Gunn, has penned a four-year extension with the Blues after becoming first-choice for the club’s U21s side.
He featured for the Young Lions throughout their European Championship qualification campaign during the 2014/15 season, winning his last cap against France in March.
The 19-year-old, who joined City in July 2011, will look to kick on again next season and follow in his father’s footsteps into league football.
Gunn was delighted to commit his future to City, and after the confirmation of the deal, he tweeted:
“Proud to have signed a new 5 year deal @MCFC hard works starts now. Looking forward to going down under.”
City are heading to Australia on a pre-season later this month, with Gunn looking likely to travel with the first-team as they prepare for the start of the Premier League in August.