Buckman, who will turn 27 next Friday, was believed to have offers from overseas clubs on the table and might have felt it was time to cash in.
But he has turned his back on the offers and decided to sign for the Highlanders until the end of the 2018 season.
A talented back who can play anywhere from second five-eighth to fullback, Buckman has not played at all this season.
He dislocated his shoulder in the first match of the pre-season against Racing 92 in Hong Kong and had an operation to mend the damage.
He is now working on rehabilitating the shoulder and may play for Hawke's Bay in the Mitre 10 Cup later this year.
Buckman joined the Highlanders in 2014 and was originally a wider squad training member. When others went down with injury, he took his chance and ended up playing every game that season.
Last season, a knee injury had him off to a slow start but he eventually got on the field and played second five-eighth in the side's run to the title.
His signing means the Highlanders have more or less signed all their key backline players for next season.
Patrick Osborne signed a contract last season to come back in 2017, though he will play in Japan for Kubota Spears in the off-season.
Malakai Fekitoa, Ben Smith, Osborne, Waisake Naholo, Aaron Smith and Lima Sopoaga are all signed until the end of next season and beyond.
Highlanders chief executive Roger Clark said earlier this week the franchise was working hard to sign players and keep the team together.
Winning a title drew the attention of overseas clubs who wanted to sign players who had won championships.
Lock Joe Wheeler signed for Japanese club Suntory earlier this week, though he may be back to play for the Highlanders next season.
