Reading manager Brian McDermott has agreed a new contract keeping him at the Madejski stadium until summer 2015.
McDermott has been the subject of intense speculation this week, with managerless Wolves reportedly keen to acquire his services.
Royals chairman John Madejski believes it is a major coup for the club to keep hold of the 50-year-old.
"I am absolutely delighted that Brian has signed and this is a very, very important day for our club," Madejski said in an official club statement. "Everybody knows how highly we rate him and he has more than repaid the faith we showed when we appointed him. He is a top manager.
"
In the space of two years he has not only taken us to the play-off final and to two quarter finals of the FA Cup, he has done so in a manner befitting to Reading Football Club.
He is extremely well respected by the staff, players and of course the supporters and I know this news will be very well received by our fans.
"From day one both myself and Anton (Zingarevich) wanted to secure Brian's services as it was only a matter of time before he was mentioned in connection with other clubs. These processes take time and we have come to a fantastic agreement that puts our club on an even more secure footing going forward.
"
With the team doing so well at the moment, it is truly a very exciting time to be a Reading fan and I for one cannot wait for the rest of the season."