Geraint Thomas has signed a new deal with Team Sky until 2014.
The Welshman had said on Monday that other teams were interested in signing him before Sky offered a new contract.
"The future is really exciting for Team Sky and I'm thrilled I will be able to play a part in it," he said.
"The team have shown their potential over the last 18 months and I am delighted to have been a part of that success."
The 25-year-old will face a dilemma next year, however, as Team Sky team principal Chris Brailsford, who is also British cycling performance director, expects his team to comepete in the Tour de France, just ten days before the Olympics.
"I wouldn't want to jeopardise the Olympics for anything," Thomas said. "I'd miss the tour to give myself every opportunity of winning in London."
Thomas won a gold medal at the 2008 Beijing Olympics as part of the Great Britain pursuit team.
