Milner, 26, had been linked with a move to Australia’s NRL.
The hooker turned loose-forward came through Tigers’ academy to make his Super League debut in 2010 and has played more than 200 games for the club.
“I’m really pleased to have signed my new deal here with the Tigers,” he said.
“There has been a lot of negotiating this year and I’m so happy to be here for the next three years.”
Milner admitted Australia had been a serious option.
He added: “It’s tempting when NRL clubs come in declaring their interest.
“Australia is sort of the big city lights. I sat down with my agent at the end of last season and we thought there was an opportunity to fulfil a boyhood dream of mine and go challenge myself in the NRL, but Cas have been good and have been very patient with me and I’m really happy I have signed and got my future sorted here.
“I’ve seen how far the club has come in the eight years that I’ve been here and when you look at us now you have to say we are definitely a top four team in the Super League competition.
“Hopefully in the next three years we can take that to the next step and win the big games and win some more silverware.
“I feel as though Cas would have taken that step even if I would have left, but now I’m signed up for the next three years I’m excited that I will get to be a part of it.”
Tigers coach Daryl Powell described Milner’s new contract as “fantastic news “.
He said: “He is obviously a part of our youth development system from the past and I am keen for him to develop as a leader and potential captain in the future.
“He is an aggressive defensive player and strong ball carrier with a real ability to pass the ball too. I am confident he will continue to improve over the next three years as we drive to win things at our club.”
Tigers director of rugby Jon Wells added: “He is rightly thought of as one of the best talents in Super League and we have made it an absolute priority this season to make sure he is with us for next season and beyond.
“Adam expressed a desire back in March to explore his dream of playing in the NRL, something he was open and upfront about with us from the start of our contract negotiations with Adam and his agent.
“Indeed, we would like to place on record our thanks to Craig Harrison for his diligent and open door approach to ongoing negotiations in the face of stiff competition from overseas.
“It is rare these days in Super League for a club to be able to keep their top talent from the lure of the NRL and yet that is precisely what we have done in securing Adam’s signature on a new long-term contract.
“I think it sends a clear and bold statement about our ambitions as a club and I am delighted that Adam will now move into the best years of his career as a Castleford Tiger.”