Brian McDermott has ended speculation linking him to the vacant position at Wolves by signing a new contract extension at Championship side Reading, running until 2015.
The 50-year-old has been approached by the Premier League side Wolves to take over their vacant managerial role, following the sacking of Mick McCarthy.
However, it is thought that the main reason behind the new deal is the imminent takeover of the club by Russian businessman Anton Zingarevich.
Owner of the club Sir John Madejski claimed that the club moved quickly to keep hold of the manager, stating that it would have been a massive loss if McDermott has been lured by the Premier League.
"I am absolutely delighted that Brian is signing and this is a very, very important day for our club,” Madejski told the club’s official website.
“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 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 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 today 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."
Reading hold hopes of promotion this year with the team currently sitting fourth in the Championship, six points off the leaders West Ham.