Vicente del Bosque has confirmed that he has reached an agreement with the Spanish football federation (RFEF) over a new contract until the summer of 2016.
The 62-year-old's previous deal was due to expire after the 2014 World Cup and initial reports suggested that he could leave the post after next year's tournament.
However, he recently stated that he was ready to stay on as national team coach and has now signed an extension until after Euro 2016.
"I can confirm that I have signed with the Spanish team until 2016," Del Bosque said at a press conference.
Del Bosque replaced Luis Aragones as Spain coach after their successful Euro 2008 campaign and has since guided them to World Cup glory in 2010 and another European title in Poland and Ukraine last year.
Spain qualified for the 2014 World Cup in Brazil by beating France to top spot in Group I.
They are currently preparing for the international friendly against Equatorial Guinea.