The 25-year-old, set to play his 50th test in the All Blacks' final Bledisloe Cup match against Australia on Saturday, will also remain with Super Rugby's Waikato Chiefs and provincial side Bay of Plenty for the next four years.
"I've grown up supporting all three teams and they're teams that I love, so to re-sign was ultimately an easy decision for me, while the security of a long-term contract is great for me at this point in my career," Cane said in a media release on Monday.
"Even though I've been in the All Blacks for five years now, there is still heaps more I want to achieve in the black jersey.
"I'm in a leadership role with the All Blacks and the Chiefs and that's something I enjoy, and I want to contribute any way I can in helping lead and drive both those teams to succeed."
Cane has been the All Blacks' first-choice number seven since the retirement of skipper Richie McCaw after the 2015 World Cup and is widely tipped as a future captain of the side.
All Blacks coach Steve Hansen hailed Cane's loyalty to New Zealand rugby, with more lucrative opportunities generally available overseas.
"I want to congratulate Sammy on his decision. He's grown hugely as a player since he came into the All Blacks five years ago," said Hansen.
"He's part of our leadership group, has captained the side on two occasions and he continues to play to the highest standards whenever he takes the field and never lets the jersey down.
"He's still a young man and knowing that he's staying through to 2021 is fantastic for the long-term growth of the All Blacks and his experience and knowledge will be invaluable to the team in the years to come."
Uncapped back Richie Mo'unga was called into the All Blacks squad on Monday as temporary cover in the flyhalf position behind Lima Sopoaga and first choice Beauden Barrett, who suffered a head knock in the last test against South Africa.
Patrick Tuipulotu will remain with the squad as second row cover for new father Luke Romano, while regular starting lock Brodie Retallick will also miss Saturday's test, New Zealand Rugby said.
The world champions will be looking to sweep the Bledisloe Cup series 3-0 when they take on the Wallabies at Lang Park in Brisbane.
(Reporting by Ian Ransom in Melbourne and Nick Mulvenney in Sydney; Editing by Andrew Both)
