The 22-year-old has been the subject of intense speculation in recent months with Parramatta Eels offering a lucrative switch to rugby league.
But on the eve of Australia's final Tri Nations test, Cooper revealed he has turned his back on league and big-money overseas moves for at least the time being.
"I'm loving my rugby at the moment," said Cooper.
"I wanted to stay and I wanted to bring it to a head now because these negotiations have taken time - but that's to be expected because we're talking about my future.
"It was time to bring some certainty to my future and now I can focus on what's approaching, including the 2011 Rugby World Cup."
Although the deal means he will be available to the Wallabies for the World Cup, any potential involvement in the forthcoming Lions tour to Australia remains shrouded in doubt.
The Lions are due to take on the Wallabies in June of 2013 and Cooper is one of a number of young and exciting Australian players currently making their mark who the Wallabies hierarchy see as the men to lead them into battle with Britain and Ireland's elite.
"Quade is a genuine talent who is still at the front end of his career," said ARU managing director and CEO John O'Neill.
"He is part of the nucleus of young players we have seen mature quickly under the guidance of coach Robbie Deans and we believe Quade is important to the Wallabies moving forward.
"Last week against the Springboks we saw what this side is capable of in ending a 47-year hoodoo on the high veldt of South Africa. We hope to see further evidence of that development tomorrow night.
"Reaching an agreement with Quade is also further evidence that we don't lose to rugby league players that we want to keep."