The Scotland international has penned a contract that will keep him at Murrayfield until the summer of 2016.
The 23-year-old, who added to his four Scotland caps in the recent autumn Tests with a start against Australia, has already racked up 58 outings for the club and was thrilled to extend his stay in the capital.
"I'm absolutely delighted to sign on here again," said Gilchrist, who is in the Gunners side to face Glasgow at Murrayfield in the first leg of the 1872 Cup on Thursday.
"It was an easy decision to make. The new coaching team and this group of players make the club a really good place to be. I think we're heading in the right direction with the right personnel in place to ensure that continues.
"This is where I started my professional rugby career and I certainly see no need to look elsewhere.
"We were disappointed with how last season went but elements of the season before were really good. Our Heineken Cup run was really special and something I want to do again with this club."
Edinburgh head coach Alan Solomons added : "This news is absolutely fantastic for us.
"Gilcho [Gilchrist] is an outstanding young player. I think he is going to go on and play many, many Test matches for Scotland.
"It's great to have another Scottish international come through like this and I think it's massively important that he stays here with us at Edinburgh Rugby."