Bailey joins Alex Pledger (recovering from foot surgery), Reuben Te Rangi and Cedric Jackson on the roster for 2015/16 and coach Dean Vickerman described the decision to re-sign as one of the easiest he will make in the off-season.
"Duane was a very valuable member of the championship-winning Breakers side last season," Vickerman said. "Duane played with great energy and effort whenever he took the floor.
"He provides the team with versatility, being able to play both the small forward and power forward positions. Duane is still establishing himself as a professional athlete and he worked hard to improve both physically and on his game throughout the year and continues to do so in the Bartercard NBL. He was a vital part of our team chemistry and culture. For these reasons, it was a no-brainer to take the club option and resign him for the 2015/16 season."
Bailey is currently playing in the Bartercard NBL with the Southland Sharks, who are coached by Breakers assistant and Tall Blacks head coach Paul Henare.
"I am very happy," the 23-year-old Bailey said. "I wasn't too sure what was going to happen, to be honest. There was a lot going on after the championship but I am happy to be back.
"I would like my role to be a bit different and I know I need to progress. So much depends on who the club signs in the meantime, of course, but I feel my versatility is a great strength. I can offer something from the [No] 2 to the 5 position and hope to get more minutes but that depends on what the coaching staff want from me and when.
"I know I can compete in that (Australian) league so I am confident and looking forward to next season and getting after another championship."
The NBL have deferred the start of the free agency period to Friday May 15.
