"I've got a job to finish here," he said in a statement. "That's the bottom line."

The Yankees missed the playoffs this year for the first time since 1993. Cashman took over as GM in 1997 and his current deal was set to expire at the end of October.

He was expected to re-sign, especially after co-chairman Hank Steinbrenner told Cashman earlier this season that the team wanted him back. But there had been rumblings that Cashman might be interested in running another club - perhaps one without such a vocal, hands-on ownership group.

"I consider coming off a season where we didn't reach the playoffs for the first time since 1993 as a personal challenge. I've never been one to run from a challenge, and I look forward to having the chance to go after this thing again," Cashman said.

"It's an incredible opportunity and honor to hold the title of general manager for the New York Yankees. With it comes a great responsibility to ownership, the people who wear the uniform and our fan base."

Cashman has plenty of work to do. Beset by injuries, a mediocre pitching staff and a disappointing offense, New York (89-73) finished third in the AL East this season, six games out of playoff position.

The GM was criticized for turning down a deal that could have brought ace Johan Santana to the Yankees last winter. He chose instead to stick with a plan of valuing young players, but it backfired when pitchers Phil Hughes and Ian Kennedy combined to go 0-8 and failed to stay healthy.

New York is expected to make a strong push for several stars who can become free agents, including lefty CC Sabathia. First baseman Mark Teixeira and pitchers Ben Sheets, A.J. Burnett and Derek Lowe could be targets, too.

"Before we could move forward as an organization this offseason, we needed to come to a resolution on the person who would hold the important position of general manager and allow us to make another run at a 27th world championship," co-chairmen Hank and Hal Steinbrenner said in a statement. "We are thrilled that Brian has accepted to renew his commitment to this organization for at least three more years."

The free-spending Yankees could have nearly $90 million in salaries coming off the books. Mike Mussina, Andy Pettitte, Jason Giambi, Bobby Abreu and Ivan Rodriguez are unsigned for next season. Center field and first base are uncertain.

Like many GMs, Cashman has a mixed record. Among his best moves this decade: signing Mussina, trading for Abreu, drafting Joba Chamberlain, promoting Chien-Ming Wang and Robinson Cano from the minors. Among the worst: signing Kei Igawa, Carl Pavano and Kyle Farnsworth, trading for Jeff Weaver and Kevin Brown.

"Brian has shown throughout his Yankees career that he has the dedication, integrity and know-how needed to perform - and succeed - in this environment," the Steinbrenner brothers said. "Having him in place allows us to begin an offseason of hard work, and we are pleased he will be working hand-in-hand with us to bring the New York Yankees back to the postseason."

A news conference was planned for Wednesday morning at Yankee Stadium.