Pep's probably staying in Manchester City until 2027. He's not only getting one year contract extension, but there is also an option to add another year. He's probably getting two year extension from Manchester City.
However, having like two years contract extension will be better for Pep, so that before the end of 2027, he can decide his next move which can be retirement then because he has tried his best, and will want to keep his reputation; and any team he can join can ruin his reputation, unless if he is able to join the likes Madrid that have money to spend always.