After pondering retirement this off season, the team's captain signed a one-year contract.
No dollar figures were disclosed, but the Rocky Mountain News reported the deal was worth $6 million, or $750,000 less than Sakic was paid last season.
The 39-year-old native of Burnaby, British Columbia, played in just 44 games last season because of groin problems and subsequent hernia surgery.
He compiled 40 points by scoring a career-low 13 goals with 27 assists and is the franchise's all-time scoring leader.
"Ultimately it came down to the fact that I still enjoy playing and competing," Sakic said in a statement. "I'm comfortable with my conditioning and my overall health. I'm ready for the start of camp and am looking forward to the upcoming season."
In 1,363 regular-season games, Sakic has compiled 1,629 points (623 goals and 1,006 assists), making him eighth on the NHL's all-time scoring list.