The news is the latest in the line of success stories for the former Firhill High School pupil, who became an increasingly prominent part of the squad this season, before making his first senior representative appearance in Scotland A's 13-9 victory over England Saxons at Kingston Park last Friday.
The contract also signals his graduation from the club's elite development player (EDP) programme and into the senior professional ranks, in which he made a try-scoring, man-of-the-match winning debut in February last year.
Since then his versatility has offered him the chance to wrestle club regulars like Tim Visser and Lee Jones for one of the wing berths, Nick De Luca for a shot at outside-centre or Greig Tonks and Tom Brown at full-back, making 15 appearances and scoring four tries.
He said: "As a local boy I used to come to the games as a fan and was even ball boy at a couple of games, so to get this chance as a fully contracted player is a dream come true, and gives me the confidence to push on to the next stage in my career.
"At the start of the season I didn't imagine I'd be involved as much as I have been, but I've managed to get my foot in the door and keep it there with a few good performances.
"I've been involved in some massive games, the derby against Glasgow Warriors and in the Heineken Cup, with each game seeming like it's the biggest game of my career. I've loved every minute of it.
"It was my goal at the start of the season to get a number of games and secure this contract extension so I need to set some new targets, keep working hard and push for more chances to start for Edinburgh Rugby."
Fife has been a familiar feature of international age-grade sides, tracking the journey from under-17 to under-20, alongside fellow Murrayfield men and EDP graduates Tom Brown, Matt Scott and Stuart McInally.
He has also showcased his talents for Scotland 7s, making is debut in the Emirates Airline Dubai 7s tournament in 2010, before scoring two tries in the nation's Bowl success in South Africa the following weekend.
The 2012/13 season started at an expected pace for the youngster before injuries to Scotland pair Jones and Brown offered him the chance to increase his game time, until being handed starting slots in the last four matches and the biggest springboard of his career.
Edinburgh Rugby head coach, Michael Bradley, said: "Dougie has worked exceptionally hard this season to break into the team so we're delighted to be able to reward another product of the EDP programme with an extended term at
Edinburgh Rugby.
"As well as being a top young player, he's a keen learner and a fantastic example of how, with the right attitude and commitment, young players from the local area will given the opportunity to be nurtured and excel at this club."
DOUGIE FIFE
Age: 22 (Born 08.08.1990)
Position: Wing/outside-centre?Weight: 14st 2lb (90 kg) Height: 6ft 1in (1.85cm)
Debut:v Ospreys, 2012 (try scoring man of the match).
Total appearances: 15; 6+4 (RaboDirect PRO12), 3+2 (Heineken Cup)
Tries: 4, 2 (RaboDirect PRO12), 2 (Heineken Cup)
Points: 20
International honours: Scotland A, Scotland 7s Scotland U20, U19, U18 and U17
2011/12 graduates of the EDP programme: Alex Black, Grant Gilchrist, Harry Leonard, Matt Scott, Alun Walker
2012/13 graduates of the EDP programme: Dougie Fife, Gregor Hunter, Robert McAlpine
Current EDP Players?: Robin Hislop (prop, Boroughmuir)?, Hamish Watson (back-row, Edinburgh Accies), ?Jamie Farndale (wing, Edinburgh Accies)?, George Turner (hooker, Stewart's Melville), ?Sean Kennedy (scrum-half, Stirling County)?, Sam Hidalgo Clyne (scrum-half, Heriot's), ?Alex Allan (prop, Loughborough University), ?Phil Cringle (prop, Kirkham Grammar School/Douglas RFC).
Guinness PRO12
Suite 208, Alexandra House,
The Sweepstakes
Ballsbridge, Dublin 4, Ireland