The central defender has been linked with a number of clubs since the start of the season but has ended speculation about his future by committing himself to the Swans until the summer of 2015.
The 33-year-old follows the lead of Leon Britton, who signed a three-and-a-half year deal on Tuesday.
Monk and Britton, along with Alan Tate, are the only players at the Liberty Stadium to have played for the Swans in all four divisions.
"I'm delighted,'' Monk told the club's official website. "This club has been my life for nearly 10 years and I love it here. My heart is here and I've never wanted to leave from the very first day I arrived.
"I've had a few offers to move elsewhere this season and I've had to do a lot of soul searching to establish what's best to prolong my career.
"The club didn't want me to go, so I felt that while I am still contributing to the team - on and off the pitch - this was the place I wanted to be.
"I'm grateful to the club for their show of faith in me, but I believe it is something I've worked hard for. I may not be the youngest member of the squad, but I've kept myself fit and competitive.
"I haven't played as much as I would have liked this season, but when I've played I think I've shown that I can compete at this level. I'm certainly not going to step aside for the younger players and make it easy for them - I'm still willing to fight for my place and do my best when called upon.
"It's hard not playing regularly, but it's something I understand. It's the manager's decision at the end of the day and I'm experienced enough to understand that.
"I believe I still have influence in the dressing room because I haven't let my standards slip. I still train hard and push the boys in front of me as much as I can."