The right-handed ace, who last week had been rumored to be a U.S. Senate candidate in Massachusetts in '08, announced Monday morning on Boston-based WEEI-AM that he plans on pitching that year.
"My wife and kids want me to continue to play, which was the only reason I was retiring in the first place ... they talked me into it and I felt it was a decision that I wanted to make to continue to play, so  will not be my last season," Schilling told the sports-radio station. "I was convinced and my family was abiding by that decision [to retire], and they talked me out of it, so I will be playing in 2008."
Schilling, who is signed through the upcoming season, also said on WEEI that he is hopeful that a deal with the Red Sox can be worked out before Spring Training.
"I've already had talks with them, and I'm hopeful something can get done soon," Schilling said. "We'll talk again this week. I think it should be a pretty painless thing in the next couple of weeks to get it done."
Schilling said he would not follow the path of former teammate Randy Johnson and head to New York and pitch for the Yankees after this season.
"Where I'm going to play beyond 2007? I hope it's Boston, but I will go out and find a home to pitch," he said. "I hope it's here, but there's also that possibility [of pitching elsewhere]. It would not be to New York."
Schilling had announced during the '06 season that the '07 season would be his last. But he had a change of heart after talking it over with his family.
"Over the last probably five to six months, my wife and kids and I have been talking, and we came to a conclusion about a week or 10 days ago that I was not going to retire in 2007 -- that I was going to go ahead," Schilling said. "I always believed physically I was going to be more than OK."
Schilling was 15-7 with a 3.97 ERA in 2006 and is 207-138 over his career, which began in 1988.
Mike Petraglia is a contributor to MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.