The news comes after there were rumours of the 27-year-old moving to France following the World Cup with the Top 14 clubs showing interest.
Tuilagi’s career has been marred by series of injuries but has made a remarkable comeback to feature for the red rose team in the ongoing Six Nations tournament and even scored a double during the previous round clash against Italy.
It is understood that Leicester chief executive Simon Cohen met Tuilagi on Wednesday in the Surrey Head Quarter to complete the paperwork for a two-year deal.
“This is a massive club and it means a lot to me and my family,” said Tuilagi to the official website of the club.
“I love the club and I want to repay the loyalty they have shown me in my time here. We are all behind Geordan Murphy and his ambitions for the team, and I’m very passionate about playing my part in bringing back the success we all expect at such a massive club.
“This was a big decision for me to make but I am very happy to be able to stay here, I have a lot of friends here, my family is happy here and the club means a lot to me.”
Tuilagi has been with Leicester Tigers since 2010 and has made 121 first-team appearances in which he scored 40 tries. He has also played 31 Tests for England apart from a solitary appearance for the British and Irish Lions during the 2013 tour of Australia.
“Manu is a world-class player with a real X-factor about his game and anyone would want him in their team. He’s been here a long time, his heart is here and we’re all delighted that he wants to stay with the club,” said Tigers head coach Geordan Murphy.
“He is at his physical peak as a player at 27, he is a leader within the squad and we look forward to seeing many more big performances from him in a Tigers shirt.” talkingrugbyunion