The 24-year-old had been linked with a move to London Irish or France after a frustrating season due to injuries - with initial contract talks having stalled.
But he has now decided to remain with the Heineken Cup winners for at least one more year, although he is not expected to play until after Christmas following neck surgery.
"We are delighted that Luke has committed to the province for another year," said Leinster coach Joe Schmidt.
"Luke is an outstanding talent and he has played a major role in Leinster's recent success."
Fitzgerald toured South Africa with the Lions in 2009 and has made 23 appearances for Ireland.
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