He has reaffirmed his commitment to stay in the country with the Gunners despite interest from overseas and the recent news of the impending departure of coach Todd Blackadder.
The 71-times capped international and Gunners vice-captain has been instrumental in helping the club to their current second place standing in both the Celtic League and pool six in the European Cup.
Murray said: "I'm massively happy to have signed again with Edinburgh.
"There is so much going on at the moment that's positive and I'm glad I can be a part of that for the next three years.
"The Gunners' growing success has been a learning curve for all the players but we have learned quickly and we're really making progress in the Celtic League and Heineken Cup.
"I'm looking forward to that continuing and to working with the players and coaches here in the future."
The 30-year-old made a try-scoring debut for Scotland against Australia in 1997 and helped his country to win the 1999 Five Nations Championship, before leading the nation for the first time in the 2003 Test win over Italy.
For the Gunners, he has played in all but two matches so far this season including notable wins over Wasps in the European Cup and Celtic League successes over Leinster at Donnybrook and Llanelli at Stradey Park.
Blackadder said: "It's absolutely superb that Scott has renewed his contract with the Edinburgh Gunners and with Scottish Rugby.
"He has been one of our best performers this season and he's a world-class international lock.
"This sends out all the right messages. We have a great club here with a fantastic set-up and to know Scott will be involved in taking Edinburgh forward in the future is excellent news.
"He has shown his confidence in the club and Scottish Rugby have recognised that by being pro-active early on. That's really important."
Scottish Rugby chief executive Gordon McKie added: "This is an important re-signing of one of our top internationals and it sends positive signals throughout the whole of Scottish rugby.
"Scott is an important player for both club and country. His commitment here in Edinburgh allows him to remain fully available to Scotland head coach Frank Hadden for all international duties."