Hogan, who was contracted to the Demons until the end of next year, has signed a two-year extension, keeping him at the club until at least the end of the 2017 season.
The Dockers were prepared to tempt Hogan with a sizeable offer to lure the young star back home to Perth, AFL.com.au understands. It is believed West Coast was also keen to court the Perth-raised youngster.
The 195cm forward, whose debut has been delayed by stress reactions in his back this season, said he was convinced Melbourne was the place for him.
"It's been a pretty hard year for me but it's exciting news and I'm glad to get it out of the way," Hogan told AFL.com.au.
"This year hasn't been ideal for me, not being able to play. I wanted to play a year first before making my decision, but with my back it hasn't turned out that way.
"The time was right just so I can get into next season with confidence, focus on the footy and not have my mind on what I'm doing at the end of the year."
Coach Paul Roos played a key role in Hogan's decision to recommit to the club, flying to Perth at the end of last year to speak with Hogan and his family.
Talks between the parties recommenced three weeks ago before Demons football manager Josh Mahoney and Hogan's manager Jason Dover, of Stride Sports Management, signed off on the deal on Tuesday night.
Mahoney said the club was ecstatic to lock away such a crucial piece of its future forward line.
"Jesse's an important signing for the club, along with the recent signings we've made," Mahoney said.
"Our focus this year was to create an environment where players wanted to stay and this signing is an indication that we are heading in the right direction."
The Demons are confident Hogan has overcome the back issues that have restricted him for much of this season and do not anticipate any long-term affects.
Dover said the timing of the new deal was right.
"We didn't want Jesse to get to the end of the season and keep holding it out," Dover said.
"Both parties were on the same page and it was a good time to discuss it and make everything fall into place."
Hogan is around a month away from returning via the Casey Scorpions in the VFL and the Demons expect him to make his AFL debut before the end of the season.
"I'm over the hump now and the back's feeling good, so I've just got to finish my rehab now and everything should be fine," Hogan said.
The Demons recruited Hogan in the 2012 mini-draft as a 17-year-old, after exchanging draft picks with Greater Western Sydney.