"Beauden has always been a key part of the club's plans and this year we all saw how influential he can be when he's playing somewhere near his potential," Hurricanes chief executive Avan Lee said. "I think I speak for all of the Hurricanes fans in saying there are some exciting times ahead with a player of his calibre wearing the No 10 jersey."
Hurricanes Head Coach Chris Boyd said: "We're delighted that Beauden has decided to recommit to the Hurricanes. He's been a big part of our success over the past two seasons and has developed into a real leader within the group, both on and off the field.
We all saw the influence he had this season and his combination in the halves with TJ Perenara continues to go from strength to strength. It's an exciting time for the club and there's no doubt Beauden is a big part of our plans in the coming seasons."
Barrett, who scored a try in the World Cup final and has overtaken Aaron Cruden as the All Blacks' best No10, has played 40 tests.
All Blacks coach Steve Hansen was thrilled to get Barrett's signature.
"It's great news for the team and great news for Beauden. 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."