Tanaka released a statement through the Yankees Friday that he will remain with the team for the remaining three years of his original contract.
"I have decided to stay with the Yankees for the next three seasons," Tanaka said in the statement. "It was a simple decision for me as I have truly enjoyed the past four years playing for this organization and for the wonderful fans of New York.
"I'm excited to continue to be a part of this team, and I'm committed to our goal of bringing a World Series Championship back to the Steinbrenner family, the Yankees organization, and the great fans of New York."
Tanaka had until 11:59 p.m. Saturday to opt-out of the seven-year, $155 million contract that he signed with the Yankees in Jan. 2017. He will be paid $67 million over the next three seasons.
Tanaka was granted the opt-out provision after seeking it in the original contract negotiations, and it was possible he might use it after finishing his fourth season with a flourish.
The 29-year-old Tanaka experienced an inconsistent season by going 13-12 with a 4.74 ERA in 30 starts. He gave up a career-high 35 homers, tied for third in the AL, but also ranked in the top 10 in strikeout per nine innings (9.79), strikeout-to-walk ratio (4.73) and walks per nine innings (2.07).
Tanaka concluded the regular-season with a 15-strikeout display Sept. 29 against the Toronto Blue Jays and went 2-1 with a 0.90 ERA in three postseason games. He held opponents to a .145 average in those starts.
Since joining the Yankees following a dominant career with Japan's Tohoku Rakuten Golden Eagles, he is 52-38 with a 3.56 ERA. He sustained a partial tear of his right ulnar collateral ligament in July 2014 but opted against surgery.