Mikel Arteta signed a new three-year contract to remain as Arsenal manager, the club announced on Thursday.
ESPN reported the news earlier on Thursday, with sources adding that Arteta, 42, of Spain, will receive a significant increase on his existing £9 million-a-year ($11.7m) salary.
Arteta's contract was due to expire next summer, although he told ESPN in an exclusive interview on July 4 that he didn't "predict any issues happening" when extension talks took place and last month added that all parties would address the situation when the transfer window closed.
"I feel extremely proud, very excited and am looking forward to what is coming next. I'm proud to be where I am and have the relationships that I have with everyone at the club," Arteta said in a statement.
"I feel extremely lucky to work every single day with good people and the ambition we have here. I feel very inspired, I feel challenged, I feel supported and I want to do much more than what we've already done together."
Arsenal have always been confident that Arteta would commit his future to the club, but the news will still come as a boost as they try to topple Manchester City and win their first Premier League title since 2004.
Arsenal have finished second to City in each of the past two seasons and sought to close the gap by adding Riccardo Calafiori and Mikel Merino over the summer, in addition to the late loan arrival of Raheem Sterling from Chelsea.
Sources told ESPN that Arteta played a prominent role in convincing those players to join the club, underlining how integral he has become to Arsenal's pursuit of success.
"Together with the players and everyone at the club, we are looking forward to the coming years, with our supporters, who have emotionally transformed the club and the team," Arteta said. "Our supporters have transformed individuals and we are different now. You can tell that we are different and for me, that is down to them. We look forward to continuing the journey together."
Arsenal co-chairman Josh Kroenke added: "Mikel is a dynamic and passionate manager, who is relentless in the pursuit of excellence. He has a deep understanding of Arsenal's values, and since joining us as Head Coach in December 2019, he has taken the team to another level in an Arsenal way."
On Sunday, Arsenal travel to Tottenham for the north London derby while facing significant problems in midfield, with Merino already ruled out due to a fractured shoulder, Declan Rice suspended and Martin Ødegaard injured.
Odegaard was pictured on crutches flying back to London after sustaining an ankle injury on international duty with Norway, and sources told ESPN he is likely to miss Sunday's game and could be set for a spell beyond that on the sideline.
Norway doctor Ola Sand told Norwegian newspaper VG that Odegaard had not suffered a fracture, adding: "Such ankle injuries often take at least three weeks. Anything other than that is just a bonus and then it can take longer."
Arsenal have a big week ahead, with a trip to Spurs the first of three away games including a Champions League trip to Atalanta on Thursday, followed by a visit to Premier League champions City.