Manchester City have put an end to the speculations linking the club with Bayern Munich manager Pep Guardiola after announcing that Manuel Pellegrini has extended his contract at the Etihad Stadium until summer 2017.

The former Malaga and Real Madrid boss won both the Premier League and the League Cup in his debut campaign at Manchester City. However, his future at the club has been under scrutiny in recent months after he failed to replicate that success last year.

Guardiola had been tipped to take over the Etihad hotseat for the 2016/17 season, as the former Barcelona boss still hast one year remaining on his contract at Allianz Arena.

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The Sun recently reported that City had already made the Catalan a lucrative offer to join the club next summer – with the club's chief executive officer Ferran Soriano and sporting director Txiki Begurisitain already having a strong relationship with Guardiola after working with him at the Camp Nou.

But City have now ended that speculation, announcing that Pellegrini will remain at the club until 2017 at least, after signing an extension to his contract.

"Manchester City Football Club is pleased to confirm that the contract of first team manager, Manuel Pellegrini, has been extended. The agreement, which was reached following discussions this summer, sees the contract run for two years through to June 2017," the club confirmed in an official stamement.

"Similar such extension agreements have also been reached with Manuel's backroom team of Ruben Cousillas, Xabier Mancisidor and Jose Cabello."

Soriano has expressed the club's delight over the agreement, backing the manager to build a team to fight for the title in the short term.

"We are delighted to reach this agreement with Manuel Pellegrini, who has already contributed so much to the development of Manchester City in his first two years with us and we look forward to further progress in the seasons ahead.

"This agreement allows Manuel to focus on the challenge of guiding a team capable of both fighting for domestic titles and competing for European honours."

Pellegrini will be hoping to pay back the club's trust in him during the coming campaign, which starts on Monday (10 August) with a Premier league encounter against West Bromwich Albion.

"I am proud to manage Manchester City FC and am therefore very pleased to have agreed this contract. I have a very good quality group of players and a great team of people to work with on and off the field and at all levels of the Club," he said.

"I am focussed on the coming season and confident that my team and I will respond to the constant support shown to us by everyone including of course our fantastic fans."