Osborne, who turns 29 next month, has recommitted with the club for the 2017 season, though he will play in Japan in the off-season.
Osborne was thought to have headed fulltime to Japan but has managed to negotiate coming back and playing for the Highlanders next season.
Osborne had previously played for the Crusaders and Chiefs before making his debut for the Highlanders at the start of the 2014 season.
He has played 47 games for the Highlanders since his debut in the opening game of the 2014 season, where he also scored a try.
He has formed a lethal wing partnership with fellow Fijian Waisake Naholo.
Osborne will play for Japanese club Kubota Spears later this year before returning to Dunedin for Super rugby in 2017.
Osborne trained with the All Blacks in 2014 but never got a formal call-up to the black jersey.
He has now made himself available for the Fijian national team in the upcoming June international test window.
Highlanders chief executive Roger Clark said the Highlanders were delighted the winger had committed to the team next year.
Osborne said, in a statement, he enjoyed his time in the deep South.
"My family and I have thoroughly enjoyed our time in Dunedin, in the Highlanders' environment, and are happy to re-commit for 2017,'' he said.
His decision to sign in Japan and play for Fiji was about family and the pride of playing for his country.
"I have been honoured to spend time in the All Blacks environment but am very proud of where I come from and have decided to commit myself to the Fijian team. It's an exciting new challenge that my family and I are looking forward to.''
With his Fijian availability, he will be classed as a foreign player for the Highlanders.