The 22-year-old has committed to the Kangaroos until the end of 2015.
The AFL's first Sudanese-born player, who arrived at Aegis Park as a rookie for the 2010 season, played his first AFL game this season against Brisbane in round four, before kicking six goals in just his fourth game against the Western Bulldogs in round seven.
Daw said he was thrilled to be staying.
"It's a big commitment from the club to me," Daw said.
"I'm just so happy that the club are willing to give me that opportunity again, I know I've got a lot of hard work to do from now until 2015.
"I'd like to add more games to my career so far, it's a great club to be a part of.
"I've got great teammates. I'll hopefully learn a lot more from guys like Drew Petrie and Boomer Harvey. I'm just pretty happy."
PRESS PLAY above to watch Daw's six goal haul | YouTube
Daw said he had come a long way as both a footballer and a person since he was handed a club-imposed suspension in 2012.
He was sent to train with Werribee in the VFL indefinitely after breaking club protocol while rehabilitating from a knee injury.
"The biggest thing I learnt from that experience is you can spend so much time earning respect but you can lose it like that," Daw said.
"(I was) pretty young and immature when the club suspended me, that just taught me to be more mature and what choices you make in life can really affect people around you.
"I've learnt a lot and if I wasn't a footballer, my life would be very different. I've learnt to take my opportunities as they come and just be mindful of your choices."
