The 29-year-old started the first seven of Scott Robertson's matches in charge of the All Blacks last year, cementing his place as a regular feature in the matchday 23.
His value to Robertson and New Zealand Rugby is highlighted by the playmaker signing beyond the Rugby World Cup and when the All Blacks are set to play the British and Irish Lions.
McKenzie had been linked with a move abroad, with his re-signing ending such speculation. However, he is one of the players who have enjoyed a sabbatical in Japan, playing for Suntory Sungoliath in 2022 and could take up a similar loan deal further down the line.
The 61-Test All Blacks back said he was strongly committed to continuing his career in New Zealand and striving to achieve his goals with the Chiefs and All Blacks.
"I'm incredibly excited to re-sign with NZ Rugby and continue my journey with both the Chiefs and All Blacks," he said.
"The opportunity to represent both teams is something that I'll never take for granted. I feel like I've still got a lot to give to New Zealand rugby and look forward to adding value where I can. I'm extremely motivated to win a championship with the Chiefs and ultimately hope to be a part of a successful Rugby World Cup in 2027 and campaigns beyond that."
McKenzie debuted for the All Blacks against Argentina in 2016 and appeared in all 14 Tests in 2024, including 10 starts. He has also represented the MÃori All Blacks from 2015 to 2017.
"Damian is such a valuable member of our group. He has an incredible skill set and the ability to change a game. He is just continuing to get better and better, which makes him a critical signing for us heading into the next Rugby World Cup and beyond," All Blacks head coach Robertson said.
NZR CEO Mark Robinson added: "Damian is a rare talent who has made a big contribution to the game in New Zealand for over than a decade for Waikato, the Chiefs and in a black jersey. His decision to remain in New Zealand through to 2029 shows his dedication and loyalty to the teams, people and organisations he represents."
"We're thrilled he's committed to another four years and with his best rugby ahead of him it's exciting to look forward to the impact he will have on and off the field as we enter an exciting period for the international game."
McKenzie is in his eleventh season of Super Rugby with the Chiefs after making his debut in 2015 and is the Chiefs' all-time leading points scorer with more than 1200. With 131 appearances, he is the third most-capped player in Chiefs history, alongside retired club legends Sam Cane and Liam Messam.
"We are delighted Damian has committed to the Chiefs and NZ Rugby long term. It's a significant outcome given the high level of interest he received from offshore. His on-field performances with the Chiefs speak volumes. He influences games the way few people can, and he will continue to add to his legacy, which would have to rank among the elite players to have ever pulled on a Chiefs jersey," Chiefs head coach Clayton McMillan said.
"What some people might not see, is the massive effort he puts into the community, and particularly the youth in the region. He's often the last off the field signing autographs and taking photos. It doesn't matter where we travel, he is always in demand, and he never takes for granted the impact he has on people by sharing a bit of his time."