The news is a boost to the Ospreys as they take on The Borders in a crucial Celtic League at the Gnoll on Friday night.
"This is fantastic news for the region, coming ahead of a vitally important fixture against The Borders on Friday evening," rugby manager Derwyn Jones said.
"We have been in discussion with Duncan for quite some time, and he has had time to carefully consider his position during the Six Nations. He is repaying the faith the region has put in him over recent years by committing himself to the Ospreys.
"He has now established himself as first choice loosehead for Wales, and has always shown great passion and commitment to the region. We want players who want to be involved with the Ospreys, and Duncan fits the bill perfectly"
Assistant coach Sean Holley added: "We are delighted to have secured Duncan Jones' services. He is a world-class forward who has a big future ahead of him.
"He brings intelligence and leadership to our pack as he is now an established international. It is important that we keep local regional players within the Ospreys, as there was a lot of genuine interest in gaining Duncan's signature from outside the region."