Steve Bruce has agreed a new five-year deal with Birmingham after keeping the club in the Premiership.
City chairman David Gold announced the agreement tonight and could barely contain his delight and securing Bruce's services for the long term.
Bruce arrived at St Andrews midway through last season and guided Birmingham to promotion back to the top flight through the play-offs and then masterminded their survival there this campaign.
Gold admitted he had been concerned that success could have alerted other clubs to Bruce, whose five-year managerial career has already taken in stints with Wigan, Sheffield United, Huddersfield and Crystal Palace.
Gold told BBCRadio 5 Live: "Steve has committed himself to Birmingham City Football Club for five years and I must say I am thrilled about that.
"He's proved such an exceptional talent that we were concerned we could easily lose him so signing him up for five years is particularly good news. We are very, very pleased at the moment.
"Young English managers are few and far between and he is proven, you've only got to see what he did here in that short period of time.
"We knew it was going to be really, really tough this season and yet we've come through with flying colours and I think it bodes well for next season because I think we are a stronger team.
"Sufficient to say we are very happy and I know Steve is very happy."
Birmingham have also offered new two-year deals to goalkeeper Ian Bennett and Australian winger Stan Lazaridis.
Bennett became Bruce's first choice after an injury to Nico Vaesen in March and also celebrated 10 years at St Andrews with a testimonial against Jamaica which was attended by 10,000 supporters on Wednesday.
Both players will stay at St Andrews until the end of the 2004/05 season if they accept the new deals - and Gold expressed his hope the pair would stay at City.
He added: "I'd be very disappointed if we don't do the deals with both Stan and Ian Bennett, two great servants to the football club who've been with us many years."