McCaw, 27, has resisted the lure of the big money on offer in Europe and Japan to try and lead the All Blacks to the next World Cup, which is being held in New Zealand.
"The black jersey is the most important thing to me," McCaw said in a statement. "There's more money available overseas, but personally, it wouldn't bring the same challenge."
New Zealand rugby has been hit hard by the departure of a string of top class players to overseas clubs.
Nick Evans, Troy Flavell, Doug Howlett, Byron Kelleher, Anton Oliver, Reuben Thorne, Aaron Mauger, Rico Gear, Craig Newby and Carl Hayman have all joined overseas clubs since last year's World Cup, while Jerry Collins retired last month.
McCaw's contract includes a sabbatical option, which would allow him to play overseas for a period but still be eligible for the All Blacks, but he said had no plans at this stage to take advantage of it.
"Right now, I'm feeling fresh mentally and my body seems to be handling the rugby okay so I have no plans for a sabbatical.
"I see myself playing here in New Zealand through to the next World Cup, but I appreciate that the sabbatical option is there to discuss with the NZRU in case things change over the next couple of seasons."
NZRU CEO Steve Tew said he was delighted McCaw had decided to stay in New Zealand.
"Richie's commitment to New Zealand rugby is hugely significant for everyone involved in rugby in New Zealand," Tew said.
"It shows how much the jersey means and that we can keep world-class players in New Zealand."