Aberdeen manager Derek McInnes, who worked with Burns at Ashton Gate, said: “Wes is a fantastic young talent who can play right across the front line.”
Burns came through the Robins’ youth ranks and has had previous loan spells with Forest Green Rovers, Oxford United, Cheltenham and Fleetwood Town.
He made 17 appearances with Bristol City last season, mainly as a substitute, but ended the campaign scoring five goals in 14 games for Fleetwood in League One, leading to him being called up to Wales’ pre-Euro 2016 training squad.
“He has got a brilliant attitude and plenty of motivation to do well with us,” said McInnes, who handed Burns his senior debut while he was manager at Ashton Gate.
“I would like to thank Bristol City and Lee Johnson for their help in making the deal happen as Wes had plenty of options.”
Burns triggered a new one-year contract extension in April but has now been rewarded with a fresh deal that includes a further 12-month option.
Robins head coach Johnson told his club website: “The loan spell at Fleetwood was important and I’ve seen Wes come back this summer with a gravitas of a decent player.
“He’s signed a contract that commits his long-term future to the club. We believe in him and he’s our player – it’s important people know that.
“He still has some career progression to become an established Championship player, in my opinion.
“He’ll now get the chance to play for a massive club like Aberdeen.
“Wes is very quick and that will make him stand out in Scotland.”
Burns, who has scored six times in 16 appearances for his national under-21 squad, was looking forward to more regular starts.
“The loan to Aberdeen allows me to play regularly, which is something I need, and against some top clubs like Celtic and Rangers in front of 50,000 people, as well as in Europe,” he said.