Isaacs, a Wales age-grade cap and Sevens World Cup winner, joined the Ospreys in the summer 2009, and after injuries hampered his first year with the region he has become an increasingly influential member of the playing squad.
He made his debut for the region against the Dragons at the Liberty Stadium in October 2010, with his first start coming four months later in February 2011 against London Wasps. He made his 50th appearance for the region last month in the PRO12 fixture against Connacht in Galway, and was out of contract at the end of the season.
"I'm delighted to sign up for another two years" said Isaacs.
"I've thoroughly enjoyed my time here so far. I know that I've learnt a lot over the last four years and I feel I'm still learning every day when I come to work at Llandarcy. There's a great set-up here with some fantastic coaches. I've got some great friends here, it's a place where I'm really happy to be.
"I had a difficult first year due to injuries but I had great support and I was able to put that behind me. Over the last three seasons, and the last 24 months in particular, I've been able to play a part in what the team is doing and it keeps getting better for me.
"I've had a good run this season, and that's something I've really enjoyed. Like I said, I'm still learning a hell of a lot, from the coaches and my team-mates, but if I keep working hard I can hopefully cement my place in the team over the next two years."
Andy Lloyd, Rugby Operations Manager at the Ospreys, commented:
"Tom has done really well over the last 18 months, we've really seen him develop on and off the field. There's no getting away from his versatility, but he has been able to establish himself more and more as a 13 with some solid performances.
"He's capable of producing some really exciting moments, he can beat people and he's physical, which is a good place to start from. He's getting better and better, and we see Tom as a big part of our future.
"It's great news that Tom has committed himself to the Ospreys, becoming the latest player to sign a new contract for next season and beyond. Although the financial climate remains challenging, the steps that we have taken as a business to put us on a more stable, sustainable footing, means that we can look ahead to the future positively, with decisions being made for rugby reasons."
Isaacs follows on from Duncan Jones, Rhys Webb and Joe Bearman in signing new contracts recently, while young forwards Lloyd Peers and James King did so at the end of December.