The 22-year-old’s new deal takes him up to May 2018.
A product of Edinburgh’s academy pathway and the Scotland age grade squads, Hidalgo-Clyne made his professional debut in 2013 and has gone on to make 46 appearances for the capital side, scoring 256 points.
He understudied Scotland captain Greig Laidlaw at last year’s Rugby World Cup, making a substitute appearance against South Africa.
Although born in Granada, Spain, he grew up in Edinburgh and is delighted to commit to his local side.
He said: “It’s my home town, I’ve lots of friends here and from a rugby perspective, the way that the club’s been moving forward over the last year or so, there’s no doubt in my mind that the best decision is to stay with Edinburgh Rugby.”
He helped the Murrayfield side reach the European Challenge Cup final last season and won the Guinness Pro12 Young Player of the Year award, having earlier made his Scotland debut against France at the Stade de France.
He added: “Winning the 1872 Scottish Cup last year and backing it up this year was amazing; getting to the European final last season, showing that as a club we were going in the right direction and aiming to go one further this season will be important.
“Hodgey [assistant coach Duncan Hodge] coming in to coach the backs has been a great bonus, aiming for Champions Cup rugby and to stay in the top four in the league is a big thing for the club and I’m really looking forward to the next couple of years.”
Edinburgh head coach Alan Solomons said: “I am delighted that Sam will continue his progress with us. He is an exceptionally talented young player, who, I believe, has a great future in the game. I enjoy working with him and am pleased that I can continue to do so.”