Sportal.co.nz 02.Nov.2012Getty Images
Evans, whose current deal was set to end in 2013, will remain at the Premiership champions until 2016.
The 32-year-old fly-half had been linked with a move overseas but said his decision to stay in England was influenced by his family.
"I'm looking forward to continuing to play with a great bunch of lads and to working with a special coaching staff," Evans said.
"There is no limit to what this team can achieve and I am excited to have an influence both on and off the field.
"My decision was made easy by the ambition of this great club, the success we have had and the hunger to want more.
"The support I have had from the supporters has been amazing and I will do my best to help the club stay one of the major forces in English and European rugby."
Harelquins director of rugby Conor O'Shea said Evans, who has made 16 appearances for the All Blacks, was a star of the Premiership.
"There is not a player, supporter or coach in the game in England, let alone Harlequins, who will not be delighted that Nick Evans has agreed to stay with us for another three years," he said.
"The Aviva Premiership wants the best players playing in it and Nick is one of the very best.
"While I know one of the main reasons he is staying with us revolves around his family, ultimately it is about his ambition to achieve things with this club.
"We have started something here and Nick wants to see it through."
Evans has made 106 appearances since joining Harlequins from Otago in 2008, scoring 1184 points including 16 tries.