Cashman, 41, has served as the club's GM since February 1998, and his future in the role had been in some doubt as the Yankees finished their 89-73 season, missing the playoffs for the first time since the strike-shortened 1994 campaign.
"I know I've said it before, but it's an incredible opportunity and honor to hold the title of general manager for the New York Yankees," Cashman said. "With it comes a great responsibility to ownership, the people who wear the uniform and our fan base. I've got a job to finish here. That's the bottom line."
Yankees co-chairmen Hal and Hank Steinbrenner had both publicly pledged support for Cashman's return in 2009, but Cashman had refused to negotiate a contract for himself during the season.
The Yankees completed their campaign on Sunday by splitting a day-night doubleheader at Fenway Park, and during that series Cashman told reporters that he would not permit his contract situation to drag out, saying to expect an announcement "sooner rather than later."
"Before we could move forward as an organization this offseason, we needed to come to a resolution on the person who would hold the important position of general manager and allow us to make another run at a 27th world championship," Hal and Hank Steinbrenner said in a joint statement released through the team.
"We are thrilled that Brian has accepted to renew his commitment to this organization for at least three more years."
Cashman was among the key proponents pushing for the Yankees to incorporate youth into their Major League roster instead of dealing prospects and large amounts of cash for available stars, most notably left-hander Johan Santana, who instead went to the Mets.
That philosophy coincided with an ongoing redevelopment and restocking of New York's farm system. Those changes have produced talented players who have seen success, like Joba Chamberlain, Chien-Ming Wang and Robinson Cano, but also had mixed results in 2008.
Cano struggled through a down offensive season, Chamberlain and Wang both missed time due to injury, Melky Cabrera regressed and lost his standing after beginning as the Opening Day center fielder, and both Phil Hughes and Ian Kennedy -- touted as future pieces of the Yankees' starting rotation -- dealt with injuries and inconsistency before finishing the season winless.
Neither Hughes nor Kennedy are guaranteed spots in the 2009 rotation, and Yankees manager Joe Girardi said this week that he expects adding a proven veteran workhorse to the starting five will be a key focus as the Yankees attack their winter workload.
Interest in top-flight free agents-to-be like CC Sabathia and A.J. Burnett has been strongly rumored, and the Yankees will have approximately $86 million in payroll coming off the books with free agents like Andy Pettitte, Mike Mussina, Carl Pavano, Ivan Rodriguez, Bobby Abreu and Jason Giambi.
"I consider coming off a season where we didn't reach the playoffs for the first time since 1993 as a personal challenge," Cashman said. "I've never been one to run from a challenge, and I look forward to having the chance to go after this thing again."
Girardi had said that he anticipated Cashman would be the GM through his entire managerial tenure in pinstripes, which runs contractually through 2010. Girardi said that he and Cashman speak four to five times a day during the regular season and characterized their relationship as "great."
"I'm going to keep my fingers crossed," Girardi said on Monday, as the team held locker cleanouts at Yankee Stadium. "The one thing that I have tried not to do is put pressure on him. He has to make his own decision. But I believe in Brian and I think he has been a huge part of this organization.
"I want him to come back. But that's his decision and sometimes there are tough decisions in life. I believe that he'll make the right one for him and his family."
The Yankees said that a formal press conference would be held at Yankee Stadium on Wednesday. In a statement released through the team, the Steinbrenners said that Cashman's experiences over his 11 seasons at the helm qualified him to continue in that role as the club attempts to restock for 2009.
"Holding the position of general manager for any Major League team is a challenge," the Steinbrenners said. "But to do so in the great city of New York, where baseball is passionately followed 12 months a year, you must possess a number of unique attributes.
"Brian has shown throughout his Yankees career that he has the dedication, integrity and know-how needed to perform -- and succeed -- in this environment. Having him in place allows us to begin an offseason of hard work, and we are pleased he will be working hand in hand with us to bring the New York Yankees back to the postseason."
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.