Thomson's future has been under a cloud for weeks, with many expecting he would head to Christchurch to link with a dominant Crusaders franchise.
But he has decided to stay with the Highlanders and bank on new coach Jamie Joseph's plans to reinvigorate the ailing franchise.
"This was one of the most significant decisions of my career and one that was not taken lightly, it was important for me to consider all of my options and I am happy to recommit to the Highlanders again next year.
"I am excited about the direction Jamie is taking the team, and I am very happy I will be able to remain loyal to the region," he said.
Christchurch-born Thomson debuted for the Highlanders against the Sharks in 2004.
He has 39 Super rugby caps.
A 17-Test cap All Black, Thomson first debuted in the black jersey against Ireland in 2008.
Joseph welcomed Thomson's re-signing with the Southern franchise as important retention of a locally-produced rugby talent and core part of the Highlanders' team.
"I'm very excited that Adam has decided he wants to remain with the Highlanders next year. I'm really pleased to have someone of his experience and skill back with us for the 2011 campaign.
"We have talked about our goals for next year - and I am fully supportive of Adam's desire to work on getting back into a black jersey.
"Adam now just needs to get on and start playing the type of rugby that got him selected in the All Blacks, having made the call will now allow him to concentrate on playing," Joseph said.
