The paper addresses the problem of transforming discrete‐time multi‐input multi‐output nonlinear state equations into the extended observer form, which, besides the inputs and outputs, also depends on a finite number of their past values. Necessary and sufficient conditions for the existence of the extended coordinate transformation are formulated in terms of differential one‐forms, associated with the input‐output equations, corresponding to the state equations. The difference between the single‐input single‐output and multi‐input multi‐output cases is described. The applicability of the conditions is illustrated by an example.