Ahead of this week's Amlin Challenge Cup final, Brian has already won a Grand Slam, four Triple Crowns, three Heineken Cups and two RaboDirect PRO12 (Celtic League) titles.
Brian O'Driscoll said: "I want to thank the IRFU and Leinster for allowing me the time to think about my future and discuss my options with my family.
"The support my family and the Irish and Leinster fans have shown me over the past few months, and indeed years, has been phenomenal and I am now very much looking forward to one more year playing with Ireland and Leinster."
Announcing the contract extension, IRFU CEO Philip Browne, said: "The IRFU is delighted that Brian has chosen to sign a new contract, ensuring he remains available to Ireland and Leinster for one more year.
"Brian is a truly exceptional talent and there is no doubt that this new contract will boost our game, at every level, in the coming year.
"We wish him, his Leinster and indeed his Lions team-mates all the very best in their forthcoming games and look forward to working with Brian in the 2013/14 season."
Joe Schmidt, the outgoing Leinster head coach who will take charge of Ireland next season, said: "It's great that Brian has agreed to continue playing. He's an inspirational player, not only on the pitch, but also on the training ground.
"He's played well again this season and other players continue to learn from him. I know that every squad of which he is a part will profit from his qualities both as a rugby player and a person."