Massimiliano Allegri will remain at AC Milan after holding talks with president Silvio Berlusconi and chief executive Adriano Galliani.
Allegri's long-term future as head coach had been in doubt despite the team securing UEFA Champions League qualification, with Serie A rivals Roma reportedly ready to swoop.
However, he finally sat down with the club's hierarchy and Galliani and Berlusconi have decided to retain his services.
"With Galliani and Allegri we had a frank and cordial discussion in which we revisited and analysed the past season, so there was a clarification on certain things," Berlusconi said.
"We reached an agreement on the rights and duties of the club towards the coach and the coach towards the club.
"We also talked about the type of football that Milan must play and the squad for next season, setting out guidelines for the transfer window.
"The rapport with the coach, which has never been interrupted, continues with faith and in absolute reciprocal respect."
Allegri took over at San Siro in 2010 and guided Milan to the Scudetto in his first season.