Yamaha announced earlier this week that it had secured the current points leader through to the end of 2014. Lorenzo had been the key player in the 2013 MotoGP rider market following Honda team leader Casey Stoner's decision to retire at the end of the season.
Lorenzo confirmed that Honda had approached him about next year, and that he had carefully considered it.
"I'm really happy to stay here with this brand. It has been difficult to take this decision," said Lorenzo. "This time I had an offer from another brand, from Honda.
"To make the decision was very tough. But finally I heard my heart a little bit, and my heart said Yamaha. I made a decision with my heart."
The 2010 world champion has been a Yamaha reader since moving into MotoGP in '08.
Lorenzo played down the significance of having done the deal relatively early in the season.
"The last two times we spent more months to make the decision," he said. "This time it happened like this and I just said yes to Yamaha."