The deal includes the option of an additional year and means that the 22-year-old will remain in the NRL for the forseeable future.
Widdop said he was delighted to remain with Storm and is still focused on working hard to fulfill his role within the team.
“It’s great to be staying with Melbourne Storm; I love it here. The club has been great to me since I came through their development program as a 16-year-old. This is definitely where I think I can play my best football,” he said.
“I am very settled down here and I’ve got a young family in Melbourne.
“I’m happy with my footy, but I know that there is still plenty of room for improvement to reach my full potential within our team.“
Melbourne coach Craig Bellamy is pleased the club has been able to retain another one of its rising stars.
“This is another great announcement for the club, especially the fact that Widdop is a Victorian junior. We are very pleased that Gaz has re-signed,” he said.
“Gareth is a good kid. His performances through the under 20s confirmed he was a wonderful talent with plenty of potential, supported by a real willingness to learn.
“On the field he continues to show strong improvement, especially with his direction and ability to help guide us around the park.”
Originally a fullback, Widdop has excelled for Melbourne since being switched to stand-off this season and is considered a front runner for the NRL‘s Rookie of the Year award.