The All Blacks and Hurricanes first five-eighth, who has been arguably the country's form player in recent months, said he was looking forward to building on what he has achieved.
"I love playing for the All Blacks and representing my country in the black jersey and I'm loving my footy at the moment. The All Blacks are an incredibly special team to be part of and I'm looking forward to playing my role and adding my small part to the legacy over the next few years," Barrett said.
"As well, with the Hurricanes we've built a great culture at the club and it's an exciting time to be involved with a great bunch of guys and a quality coaching staff. Next year I'm looking forward to doing everything I can to help build on our success this year.
"I'm also a proud Taranaki man, proud of my roots and stoked to be recommitting to my home province."
All Black coach Steve Hansen thought Barrett could grow into something special.
"It's great news for the team and great news for Beauden," Hansen said.
"He's fast becoming one of 'the' players in the world. He's been a world-class player coming off the bench for some time, he's now graduated into starting test matches for us, and this year he's been nothing short of spectacular. He'll continue to grow - he's not the finished product yet, by any stretch of the imagination - but as he does, I think we'll see something pretty special, so it's nice to have him signed up and secure."
Barrett debuted for the Hurricanes and All Blacks in 2012, becoming known for his pace and ability to threaten with ball in hand. He excelled in the role of the utility replacement, often coming on late in games to add spark, although recently has proven too good to leave out of the starting line-up.
He was part of the World Cup winning side last year, scoring a try in the final, and has racked up 40 test caps and scored 199 points.