Mr Woodward was tipped for a promotion
Shaun Woodward has missed out on a promotion in the Cabinet reshuffle and will remain Secretary of State for NI.
There had been speculation he would get the health or defence job.
Mr Woodward said it was a "privilege and honour" to be the secretary of state and that "huge political progress" had been made in his tenure.
"I asked the Prime Minister to enable me to help to complete this work and am very grateful to have been given the opportunity for a third year," he said.
Earlier, he said he was confident in Gordon Brown's leadership.
Mr Woodward was a Conservative MP between 1997 and 1999 when he defected to Labour. He has held the safe Labour seat of St Helens since 2001.
He moved up the ministerial ranks, joining the Cabinet for the first time two years ago.
He had been linked to to the job of Home Secretary which will be vacated when Jacqui Smith steps down, but that has gone to Health Secretary Alan Johnson.
Some political sources had also linked him with the Defence Secretary job but that has gone to Bob Ainsworth, the Armed Forces Minister.
John Hutton is standing down as Defence Secretary and is leaving the Cabinet.
Gordon Brown is shaking up his cabinet after Thursday's European and English local elections.
Mr Woodward said the prime minister's mood was "very strong, very resilient".
"It's almost when things are at their toughest that you see the real mettle of this person," he said.