The gifted 19-year-old has rejected offers from big European clubs, notably Barcelona and Real Madrid, to stay at home and become one of the world's richest footballers.
"I'm very happy, it's another decision I'm taking in my life, a family decision," Neymar told a news conference where he was handed a Santos shirt with the number 2014 on it by club president Luis Alvaro de Oliveira.
"There was interest [from other clubs] but my father didn't tell me about any concrete offers. I always said I wanted to stay here."
De Oliveira said Neymar was tired of speculation about his future.
"Neymar has got tired of being 'sold' to Barcelona and Real Madrid in these last months. The truth is he will stay at Santos until 2014," he said.
Local media said Neymar would earn around 3 million Brazilian real ($1.73 million) per month in salary and sponsorship, about 20.4 million a year.
Englishman David Beckham is the world's highest paid football player, according to Forbes magazine, earning $40 million a year, followed by Portugal's Cristiano Ronaldo on $38 million.
The highest paid Brazil-based footballer is Ronaldinho, who returned home this year to play for Flamengo and is fifth on $24 million per year.
SANTOS SUCCESS
Neymar, who helped Santos win the elite South American Copa Libertadores this year, said his own form and that of his club helped with his decision to stay in Brazil.
"No-one knows what might happen tomorrow and this moment in my life is marvellous," Neymar said with a wide grin.
"It's a choice that wasn't very difficult because I'm happy here, I play for marvellous fans... and for the joy of staying in my Brazil, there is no better country.
"I hope to continue writing history," added Neymar, father of a three-month old baby and among the 23 players vying for the title of FIFA World Player of the Year.
Neymar first rejected an offer from abroad more than a year ago when he opted to stay at Santos after an approach by Chelsea and the Brazilian club added a clause putting the price to break his contract at 45 million euros. This sum was increased in the new contract but Santos did not give details.
The teenager has become a key member of the team Brazil coach Mano Menezes is building to host the World Cup and is their top scorer under Menezes with eight goals.
Neymar wore a black shirt with the phrase "It's good to be king" in English on it but told reporters there was only one king in football in an obvious reference to Pele.
De Oliveira, however, believes Neymar can rival Pele in the eyes of Brazil fans.
"Santos want to show that things can be different. We no longer accept the idea of [Brazil as] an underdeveloped country, always at the mercy of economic powers," he said.
"Neymar is staying to consolidate himself as an idol. What's more, from now you will be witnesses to the birth of a myth."
