The Colts have agreed to terms for a five-year deal with McAfee on Friday, keeping him off the free-agent market just four days before he could have signed with another team.
McAfee announced the five-year deal on his Twitter page. Terms of the deal weren't immediately available.
McAfee was Indy's seventh-round pick in 2009 and has never played for another team. Last year, the Colts tagged him as their franchise player.
He responded by averaging 46.0 yards on 76 punts, including a net average of 38.5, and set a franchise record by pinning 27 punts inside the 20-yard line. He also recorded touchbacks on 41 of 86 kickoffs.
McAfee holds franchise career records for kickoffs, touchbacks and gross punting average.