The Republic of Ireland Under-21 international, who arrived from Torquay in 2012, was in the final 18 months of his previous deal but is now contracted until 2017.
O'Kane has been one of Bournemouth's most impressive performers on their return to the second tier and he explained how it made sense to extend his stay on the south coast.
"There was never any doubt in my mind that I would be signing," he told the club's official website.
"This club has been a big part of my career - coming here from League Two, to establish myself in the team, to win promotion to the Championship - and I think we have more than held our own in this division.
"The club is going in the right direction and the direction I want to go in. Hopefully we can continue to progress.
"At the minute, I'm learning my trade in the Championship and want to progress, which mirrors where the club wants to go and the path it wants to take.
"It made sense for me to commit my future here."