The DVD rental chain asked agencies to submit proposals for the account earlier this month. However, Blockbuster has now decided to renew its contract with its incumbent agency, MEC.
MEC won the business in 2006 without a pitch.
Blockbuster is expected to significantly ramp up its marketing spend to an estimated £9 million this year.
Tom George, the chief executive of MEC, said: "Retaining and growing our existing business is absolutely fundamental to our ambitions as an agency. Blockbuster is a great client, and this a fantastic endorsement of the team and the excellent work they have put in over the past 18 months."