The 36-year-old power forward has led San Antonio to the play-offs every season, including nine division titles and four NBA championships, since being taken by the Spurs in the first round of the 1997 NBA Draft.
Terms were not disclosed, though reports estimated it was a three-year, $36 million deal and coach Gregg Popovich said it meant Duncan, a two-time NBA Most Valuable Player and three-time MVP of the NBA Finals, would end his career with San Antonio.
"Tim Duncan has established himself as one of the best players in NBA history," Popovich said.
"He is an unselfish superstar who loves to compete and has only one goal when he steps on the court - to do whatever it takes to help his team win. We are all thrilled that he'll spend his entire career as a San Antonio Spur."
Over the 15-year span of Duncan's career, the Spurs have a .702 winning percentage in the regular season that is the best by any NBA team over a 15-year span.
Duncan is the only player ever in the NBA to be named to both an All-NBA Team and an All-Defensive Team in each of his first 13 seasons.
In, 1,111 regular season games, Duncan has averaged 20.3 points, 11.3 rebounds, 3.1 assists and 2.22 blocks a game.