The veteran’s future was uncertain after he was dropped for the first time in years during the season.
But the 32-year-old will go on to play in his 15th season next year with the Swans confirming the news on Friday.
Grundy is known for being one of the most reliable key defenders over the past decade for the Swans, especially the last three years as he has been the only tall defender in the squad.
The 254-gamer was taken in the 2004 rookie draft and has won a premiership and finished a career-high third in the Swans 2016 Best and Fairest count.
Sydney’s Head of Football Tom Harley told the club’s website he was pleased to lock down Grundy for another season.
“We’re rapt to have Heath continue his outstanding playing career at the Swans for another season,” Harley told sydneyswans.com.au.
“Heath has been such a reliable and valuable member of our team for a long time now and it’s great he’ll be playing on again in 2019.
“He’s an outstanding clubman, a premiership player and a key member of our backline, and we look forward to him continuing his career into a 15th year.”