Cesare Prandelli has insisted he wants to remain in charge of Italy and help them build on their run to the final of Euro 2012.
The Azzurri were beaten 4-0 by Spain in a one-sided match on Sunday night but come away from the tournament with their reputation significantly enhanced.
Prandelli has also received rave reviews for his good work and reports suggested that he could leave his role to return to club football.
He has previously admitted that he misses the day-to-day involvement of coaching at domestic level, but has decided after the loss to Spain that he wants to stay with Italy and take the team forward.
"The project continues," said Prandelli, who will meet with Italian Football Federation president Giancarlo Abete in the coming days.
"I did have moments when I had certain thoughts, but the feeling with the Federation has always been really good."
Prandelli, who took over from Marcello Lippi after the 2010 World Cup, confirmed that losing so heavily had convinced him to stay on.
"Of course in my choice, this defeat is also a factor, the impossibility of leaving like this," he said.
"This is a fascinating project, difficult but fascinating."