Dew, who has been with the Swans since 2010, will move into a new role as strategy and midfield coach.
The former Port Adelaide and Hawthorn premiership player had been linked to the vacant senior assistant role at the Demons, which is likely to see the successful candidate take over from Paul Roos as senior coach in two years.
Swans coach John Longmire said retaining the highly rated assistant was a positive for the club.
"We understand that there were other clubs interested in Stu, but to have him re-commit to the club is a strong show of faith in the Swans football program," Longmire told sydneyswans.com.au.
"We're glad 'Stuey' has confidence that the Swans will continue to assist his development as a coach."
