"The development of the best local talent is at the heart of everything we do here at the Ospreys," Holley said.
"So it is always excellent news when we are able to retain the service of three local players who learnt the game at clubs across the region.
Twenty-eight-year old Tandy has signed a new three-year deal that will keep him at the Liberty Stadium until 2012. Swansea RFC product Vaughton, 26, has agreed a one-year extension to take him until the end of the 2009/10 season.
Breeze, 21, has agreed a two-year extension to take him to summer 2011.
Ospreys coach Sean Holley is delighted to have secured the services of three more players, following on from former New Zealand flanker Marty Holah, who signed a 12-month extension earlier this month.
"Steve Tandy was one of the first ever Ospreys and we are delighted to retain his services... he is a natural leader who is respected by his peers," continued Holley.
"Jonathan is now approaching 50 appearances for the region and is an important part of the current Ospreys squad.
"We believe that he can still improve further over the course of his new contract and look forward to helping him reach new levels.
"Marc Breeze has been a consistent performer for Aberavon RFC in the Welsh Premiership this season.
"After introducing him as a squad member this summer we have been impressed with his professionalism and his attitude to improve."