Webber has been on year-by-year deals with Red Bull for several seasons, and had been linked with a switch to Ferrari to partner Fernando Alonso in 2013.
But the reigning champion team has now completed a contract extension with the British Grand Prix winner, who said staying put alongside Sebastian Vettel was the most logical option.
"I've been with Red Bull Racing since 2007 and have achieved nine grand prix wins during that time," said Webber.
"I'm high on confidence at the moment and firing on all cylinders. I know the team well and I'm very comfortable here; we have grown together over the years and it feels like absolutely the right thing to stay with Red Bull for another season.
"The team is constantly working hard to improve in all areas and we've shown that together we can win races.
"It's great to be able to make this announcement off the back of the win in Silverstone at the weekend and I'm looking forward to competing on the edge and pushing myself in every race again next season."
Team boss Christian Horner added: "Mark has driven very well in the first nine races of this season and his performance has been impressive.
"Much of his Formula 1 success has been during his time with Red Bull Racing and together we have achieved 10 poles, nine wins and 31 podiums.
"As there was a strong desire from both sides to continue the partnership, it was a logical decision to extend our relationship and it is with great pleasure that we confirm Mark will drive for us in 2013."
Webber joined Red Bull at the start of the 2007 season. The 35-year-old Australian has finished third in the championship for the past two seasons, and was a long-time points leader in 2010.
Webber is currently Alonso's main rival for the 2012 title, closing to within 13 points of the Spaniard when he beat him at Silverstone.