23-year old Biggar, whose current deal expires at the end of this campaign, will now stay at the Liberty Stadium until at least the end of the 2015/16 season.
Speaking after signing the new contract, Biggar said:
"This is an organisation that has always been very good to me and supported me so it's great that I can recognise that by committing my future to the region.
"It's always nice to get things sorted and to be all done and dusted, and now I've signed it means I can concentrate on the next few weeks and helping the team to secure a play-off place without any distractions."
A product of the Ospreys' elite youth development pathway, Biggar gained his early rugby experience with Gorseinon RFC and Gowerton Comprehensive in Swansea, before representing the region at age-grade level and playing for Swansea RFC in the Welsh Premiership.
He made his senior Ospreys debut as an 18-year old, as a late replacement in an EDF Energy Cup semi-final win over Saracens at the Millennium Stadium almost exactly five years ago in March 2008, with his first start coming in an away win over Glasgow in September that year.
Since then he has flourished in the Ospreys environment, his durability and consistency in the number 10 shirt allowing him to reach some considerable landmarks for the region.
In November 2011, less than a month after his 22nd birthday, he overtook James Hook to become the region's all-time highest points scorer, a record he has since extended to 1,206. Having topped the scoring charts for the last three consecutive seasons he is on course to do so again this time around.
Meanwhile, in April 2012 he became the youngest ever Osprey to reach 100 regional caps, and now stands on 121 appearances.
An age-grade international, he won his first senior Welsh cap in November 2008, against Canada, and now stands on 16 caps having established himself as first choice for Wales over the last two months during their successful Six Nations campaign.
Having been in negotiations regarding his new deal for some months, Biggar admitted to being relieved to have finalised his contract, indicating that the ambition of the region matched his own which had been the deciding factor:
"Some negotiations can be straight forward, others take a little bit more time, but what's important is that you get it right in the end" he said.
"I think that both parties are very happy with where we are and can really look forward to the future positively. The Ospreys wanted to keep me and I wanted to stay so it's always been a case of agreeing on a few things. It's not just financial, there are other things that come into the equation.
"This is a great environment with fantastic facilities and great coaches. It brings the best of you as a player and I consider myself fortunate to have come through this system to represent my home region. That's very important, as you have to be happy in your environment, wherever you are.
"My aim is to be competing for trophies with the Ospreys every year. I've discussed this at length with the coaches and management here, I've made that ambition absolutely clear, and I wouldn't have committed for the next three years if they didn't share those aims. We know how difficult it is, with the salary cap and things like that, but that doesn't mean we can't continue to be successful.
"There are a lot of good players here at the Ospreys. We've got experienced, quality senior players and some exciting youngsters coming through and we've shown that we can get the right blend to be competitive. There's no reason why we can't continue developing from within while competing with the best. I'm excited about what we can potentially achieve as a group."
Andy Lloyd, Rugby Operations Manager at the Ospreys, said:
"The news that Dan has re-signed for another three years is a huge boost for the Ospreys, looking towards the end of season run-in and beyond that to the future of the region.
"It's a huge statement from the business and credit needs to go those involved who have worked extremely hard to put the business where we are, enabling us to keep such a prime young, local talent.
"To be able to re-sign a young man of his calibre, particularly given how his stock has risen over the last two months on the back of some very accomplished performances in a Wales shirt, is a huge boost for everyone. That he is happy to commit his future to the Ospreys speaks volumes about the environment that we have created here.
"Daniel is an Osprey through and through but he is also a born competitor so its understandable that he didn't just jump in and sign as although we are his home region he wanted to make sure that we shared the ambitions.
"He epitomises everything we want in an Osprey. He is hard working, committed to the cause and completely dedicated to being the best player he can possibly be. He's a fantastic goal kicker whose record speaks for itself, but it's important to stress that he's not just a kicking machine, he's got a lot of other talents and he directs our game well.
"I'm sure that he's going to have a massive future, with the Ospreys and with Wales."
Andrew Hore, Ospreys' Chief Operations Officer, added:
"It's fantastic news that we have been able to retain Dan's services for another three years. It's important if we truly want to represent the local community that we have young, local talent like Dan wearing the shirt so that children can aspire to follow in their footsteps along the development pathway.
"However, we mustn't take our ability to keep local players here for granted. We need to continue growing our support base, we need bums on seats, people watching their region, as without increased funding we face the risk of losing players like Dan in the future."
Biggar is the ninth player to have signed a new contract with the Ospreys following on from Richard Fussell, Tom Grabham, Tom Isaacs, Duncan Jones, Rhys Webb, Joe Bearman, Lloyd Peers and James King
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