"Tom is the most successful Open champion still playing today and has made a huge contribution to the championship over the last 40 years," Peter Dawson, chief executive of the R&A, said.
"His performances in winning the Open on five occasions were truly outstanding and to come so close to winning a sixth championship in 2009 demonstrates his longevity in the sport.
"We are delighted that he will be able to play in the Open next year."
Watson, who stirred the golf world at age 59 by nearly winning the Open at Turnberry to become the oldest major champion before losing in a playoff to Stewart Cink, happily accepted the opportunity, saying: "I will be there if I have to drag myself there."
"Some of my finest memories in golf have come from playing in the Open Championship," said Watson, who has also won two Masters and a U.S. Open crown, and will be competing in his 37th British Open in 2015.
"I am very proud and honoured to be given this opportunity to play once again in St Andrews next year. It is a special place for everyone in golf..."
American Watson, who believes he remains competitive for the championship, will be teeing it up starting on July 17 at Hoylake in the fifth and last year of the exemption he earned with his rousing Turnberry performance.
"I appreciate more than you will know the extension of the exemption," he said about being invited to play at St. Andrews.
"There's something very special about me being able to finish out my British Open career, unless I play and finish in the top 10 (at Hoylake) and have the opportunity to play more Open championships.
"If not, (St. Andrews) is the place I want to finish my career playing the Open championships, 40 years from the first time I played."
Watson, who will serve as U.S. Ryder Cup Captain for this year's matches, is one of four players win the Open five times along with James Braid, JH Taylor and Peter Thomson. Only Harry Vardon has won more championships with six victories.
(Reporting by Larry Fine; Editing by Mark Lamport-Stokes)
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