Shunning offers from Europe, Waugh has agreed to a new two-year deal that will keep the Waratahs skipper at the Sydney-based province for 12 successive Super rugby seasons and also delivers him an opportunity to reach the 100 Test caps landmark.

Waugh, 29, has played 77 Tests for the Wallabies after a 2000 debut against England, making him the 10th-most-capped Australian player.

He passed the 100 Super rugby games milestone earlier this season with the Waratahs.

The inspirational flanker said it was ''certainly not a financial decision'' and felt he still had a lot to offer both at provincial and international level.

Waugh revealed the deal may not have gone ahead without input from a third party.

''The gap would have been too big to sacrifice that amount of money,'' Waugh said.

''But I've always said all along that I'm happy to sacrifice a significant amount of money to stay here and I guess I've done that.

''This is not a decision I have made lightly.

''There were many different factors to consider. However, I have a real love and passion for representing the Waratahs and Wallabies.

''I strongly believe I have a considerable amount to contribute and achieve at club, provincial and international levels of rugby over the next period of my career.

''I am very positive about the direction in which both the Waratahs and Wallabies are heading, and it is a strong goal of mine to be an integral part of this development.

''I am thoroughly enjoying my rugby in Australia and have a real drive and desire to enjoy many successes over the next period of time.''

ARU high performance unit general manager David Nucifora welcomed Waugh's decision.

''Phil is obviously a highly valued player and we're delighted he's decided to continue his career in Australia,'' Nucifora said.

''It's important we keep experienced players here, from a Wallabies perspective and also for the Super rugby provinces.

''One of the things we've attempted to do over the last 12 months is build the depth in Australian rugby and increase the competition for spots in the Wallabies side.

''We're on the way to doing that across the board and it's exciting because improved performance will be a by-product of those battles for selection.

''Continuing to strengthen our ranks is important for the national cause. Retaining Phil was important to us.''

NSW coach Chris Hickey said Waugh's re-signing was a significant boost for the Waratahs. AAP