“I discussed everything with my club and my family before making a decision," Nacho told RTVE.
"There are always offers from abroad, but I have decided to stay at Real Madrid for another year. I am very happy with this decision.
"I really want to continue in Madrid,” the defender added.
Real Madrid have an offer ready for Nacho to extend his contract, the defender is expected to sign it after the international break.
Nacho went on to speak about Spain's Nations League semi-final clash against Italy later this week.
"Luka would make things very difficult for us, but I hope we'll see each other in the final," Nacho said.
"Here we are all playing it, not just the coach, whom I see with desire and enthusiasm.
"Between youngsters and veterans, we can win the Nations League.”
