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South Sydney winger Alex Johnston has told teammates he is staying with the club after he was previously resigned to leaving for an NRL rival.

South Sydney winger Alex Johnston has sacrificed about $200,000 to remain at the club after he agreed to a two-year NRL extension on Wednesday.

The 25-year-old Rabbitohs junior was being pursued by NRL rivals including Melbourne as salary-cap restrictions looked set to force him out of Redfern.

However, Johnston told ecstatic teammates on Wednesday morning he would be staying at Souths after player and club previously seemed resigned to parting ways.

"The most cheering and clapping I've heard for a long time in the change room," coach Wayne Bennett said.

"We all make sacrifices here. You can't build a really good team and club without sacrifices.

"I'm sure a lot of other boys are in the same boat as well.

"We're pleased to have him and that he can stay on.

"He's a Souths junior and it's important to the club to maintain that situation."

Johnston has been in superb form for Souths this season with 14 tries - the second most in the competition behind Wests Tigers' David Nofoaluma (17).

"I'm absolutely stoked to be staying and continuing my dream of being a one-club man," he said.

"I'm relieved to finally have my contract sorted so I can now just concentrate on footy and scoring more tries.

"I'm really looking forward to the next couple of years and playing with this group of men we have here at Souths."

His prolific strike-rate would have made him the ideal replacement for Sydney-bound Josh Addo-Carr at the Storm.

They will be on the hunt for another suitable replacement given Addo-Carr will leave Melbourne at the end of the season for family reasons.

It is understood the Tigers have tabled a four-year deal for the NSW Blues winger, who is keen on playing fullback.