(CNN) -- England coach Fabio Capello has signed an amended contract that will keep him in charge of the national side until after the European Championships in 2012, the Football Association (FA) has announced.
The new deal removes a break clause for both the FA and Capello, and comes after speculation that European champions Inter Milan wanted the 63-year-old as their new boss to replace Jose Mourinho, who joined Real Madrid.
The news came just hours before England's squad flew out to the World Cup finals in South Africa that begin on June 11.
Capello added: "I am very happy about this and would like to thank David Richards [Club England chairman] and the FA for their continued support and assurances about my future.
"I always wanted to stay until the end of my contract. In South Africa we are totally focused on the World Cup."
Capello took charge of England in December 2007 and led them to top spot in their group during World Cup qualification.
Former FA chief executive David Triesman had been negotiating with Capello over his contract until he was forced to resign after claims made by a British newspaper.
Club England chairman David Richards quickly picked up the talks, leading to Wednesday's announcement.
Richards told the FA's Web site: "We're very pleased to have Fabio's commitment for another two years and it's good that we have been able to resolve this before the team flies to South Africa.
"Now we can all concentrate on the World Cup and give Fabio and the players our full support."
England's first game at the World Cup is against the United States in Rustenburg on June 12.