Fantasia, who played 19 games in 2016, said he is excited about what the club can achieve this season.
“Essendon has such a strong culture and I’m thrilled to be a part of such a proud Club,” Fantasia said.
“We know there is a lot of hard work ahead, but we want to take this Club to its next period of sustained success.
“It’s a very exciting time for this Club and I’m pumped to be part of it.”
The 21-year-old has played 27 games in three years with the club.
Recruiting manager Adrian Dodoro, said Fantasia was one of several players who had benefited from more exposure last season.
“Orazio had an outstanding season in 2016 and was one of the bright lights to come from a tough year when it came to results on the scoreboard,” Dodoro said.
“His development was fast tracked to the point where he became one of the most exciting small forwards in the competition.
“He’s an exciting talent that brings speed to our forward line, and in time could add plenty of dash to our midfield.
“Orazio is extremely highly regarded for his professionalism, and he is a great team member who we believe has the potential to develop into a Club leader in the future.”