The Magic center had the option of ending his five-year deal in July and entering the open market.
"I'm glad this is finally over," Howard said at a press conference to announce the new pact with the Magic. "It's not as easy as some people think. It's been very hard. We're talking a career-changing event. Most people don't see that.
"I'm very loyal and I've always put loyalty above anything."
Howard requested a trade in the preseason and maintained that stance all regular season until changing his mind this week and expressing a desire to remain in Orlando this season.
The move ends what can only be characterized as a tense regular season for the Magic. Howard had requested to be traded and gave team officials a list of three teams the New Jersey Nets, Los Angeles Lakers and Dallas Mavericks that he wanted his agent, to be allowed to talk to.
At the time Howard expressed frustration with the Magic's management and what he felt was an unwillingness to include him in personnel decisions and to improve the roster pieces around him. He went as far as to praise the relationship he felt All-Star Dirk Nowitzki has with Mavericks' owner Mark Cuban.
Following those December revelations a daily drama began trailing the Magic and upset a fan base that lived through Shaquille O'Neal leaving town to join the Lakers in 1996.
The soap opera included a very awkward All-Star weekend for all parties in Orlando last month which centered on Howard and his plans for the summer of 2012. The 26-year-old center repeatedly stated his affinity for the only city he has played for during his eight NBA seasons.
He kept that posture until a surprise statement following the Magic's home victory over the Miami Heat Tuesday in which he went back on his trade request and said that he wished to remain in Orlando throughout the season.
The decision was in part, he said, to give the Magic a chance to win a NBA title.
Now he said "he's all in" and ready to give the organization a full season to improve the roster going forward.
"Now we can get back to playing basketball and having some peace and trying to win a championship," said Howard, who said he went back and forth with his decision until as late as after the Magic's loss to San Antonio Wednesday night.
Magic general manager Otis Smith said the team was fully ready to trade their six-time All-Star before Thursday's deadline before he signed the waiver."
"It was real," Smith said of the possibility of dealing Howard. "We weren't rolling the dice."
Provisions in the league's new collective bargaining agreement give the Magic the ability to offer Howard $30 million more than any other team if he becomes a free agent. Orlando can offer him a five-year contract extension with 7.5 percent annual raises, while other teams are capped at offering a four-year pact with only 4.5 percent raises.
The Magic are 28-16 this season and seven games behind first-place Chicago. Howard is averaging 21.2 points and a career-best 15.2 rebounds. He passed Nick Anderson earlier this season as the Magic's all-time leader in points scored.
"They know how I feel about the city," Howard said after Spurs game. "I've sat down with them on numerous occasions and talked about what we can do together, but I can't do it all by myself," Howard said about his teammates. "You know, I want them to help. I want them to be involved with changing Orlando. That's always been my goal."
Howard said that he was asking for trust from the Magic.
"They took a chance on me at 18. And what did I do? I gave them everything I had for eight years," Howard said. "Take a chance again. I go out every night and play hard. If I didn't want to win, I would have dogged it. But that's not who I am. And look where we are. We're in a great position."