The Colombian, first courted by the Blues, looked destined to join Juventus in January but has now pledged his future to the Nerazzurri until the summer of 2017
The Colombian looked certain to leave San Siro in the winter transfer window and had all but agreed to be part of a swap deal with Bianconeri forward Mirko Vucinic, while - as first revealed by Goal - his agent had previously held talks with Chelsea.
However, Nerazzurri president Erick Thohir pulled the plug after fan outcry and his long-term commitment to Inter has now been sealed with a one-year contract extension which could see him stay in Milan for at least another three years.
"I am very happy that I have reached another dream," Guarin told the club's official website on Monday. "I will share this with my family, my team-mates and with the people I am closest to.
"Two years have passed since I arrived and it has always been a positive experience and, with every day that has gone by, I have learnt a little more. Today I can say that for the next three years I will use those experiences and the positive things I have picked up and make the most of them.
"This is a good moment to say 'thank you' to the president, the coach, the staff but above all my team-mates and the fans because the faith they have placed in me has been so important.
"Let’s hope I can score to celebrate my new contract, both to help the club to win and to celebrate this special moment."
The 25-year-old has made 29 appearances for Inter this season, scoring three goals and bagging 12 assists in the process.