Deans has been in charge of the Wallabies since 2008 but had been linked with the New Zealand job following the conclusion of September's World Cup.
However, the 51-year-old has ended all speculation by signing a deal until 2013 and has revealed that he is only concentrating on two international tournaments.
"A large number of players have re-committed to Australian rugby this year, I'm pleased to be joining them," said Deans.
"My priority remains, as it always has been, on the preparations for the final [Tri-Nations] test against the All Blacks in Brisbane, and then for the rugby World Cup that follows in New Zealand."
Deans was awarded five international caps by New Zealand during his playing career.