Due to come out of contract at the end of next season, the 22-year-old has signed a new three-year deal to remain with the Bombers.
"The future is bright at Essendon," Martin said.
"It's the potential in our young side and the vision that (coach) Brad (Scott) has for the team that excites me for what is to come.
"I'm so thankful for Essendon for giving me the opportunity to live out my dream of playing AFL."
After failing to win a West Coast deal, Nic Martin has played 44 AFL games in red and black.
The Subiaco product was overlooked by West Coast after training with the Eagles in the 2022 pre-season.
But Essendon picked up Martin as a supplemental selection ahead of that campaign to become one of the Bombers' most important players.
He earned a Rising Star nomination after kicking five goals on debut in round one, 2022, against eventual premiers Geelong.
Martin has kicked 36 goals in 44 games, spending time up forward, in the midfield, and on a wing.
"Nic has exceeded expectations since joining the club at the start of last year as a SSP player," Essendon list boss Adrian Dodoro said.
"His professionalism on and off the field has been outstanding, and it's fantastic to see him getting the rewards after years of hard work."
The Bombers have a number of key players, including Andrew McGrath, Jake Stringer and Jye Caldwell, coming out of contract at the end of next season.
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