The 36-year-old former Real Sociedad and Paris St Germain left-back joined Bilbao in 2018, has turned out in 278 matches for the club, and was a key part of the side when they won the Copa del Rey in 2024 to end a four-decade trophy drought.
Berchiche made 39 appearances for Bilbao last season across all competitions.
"He is a true icon amongst the fans for his competitiveness and determination," Bilbao said in a statement.