Martin, 26, joined the team as a neo-pro in 2008 and has since shown promising signs that he could become a big stage-race contender.
The Birmingham-born rider won a stage of the Vuelta a Espana in 2011, the 2010 Tour of Poland and the Route du Sud in 2008.
Martin, the cousin of Nicolas Roche and nephew of Stephen Roche, also posted victories in the Japan Cup and the Tre Valli Varesine in 2010, while he was the Irish Road Race champion in 2008.
"This team feels like family to me, and after the progression we have achieved together since I signed my first contract, it is the only team where I feel that I can continue to achieve my full potential as a bike rider," Martin said.
"Having fun has always been my ethos toward my job and passion, and Garmin-Sharp-Barracuda is an environment where I feel comfortable on both a social and professional level."
Martin made his Tour de France debut this year, and followed that up with an appearance at the London Olympic Games.
"It's been an incredible few months for me with finishing my first Tour de France and competing in the Olympics, and re-signing with the team just adds to it," he added.
Meanwhile, Brazilian Murilo Fischer has signed a two-year deal with French team FDJ-BigMat for the next two seasons.