Gerardo Martino has announced that he will be staying on as Paraguay head coach until the conclusion of the 2011 Copa America.
The Argentine-born coach is widely regarded as a national hero back in Paraguay for guiding the national side to the quarter-finals of the World Cup for the first time in their history.
La Albirroja were eliminated by a late David Villa goal in the last eight as European champions Spain progressed to the semi-finals of the tournament in South Africa.
Martino's future as head coach had been in serious doubt after reports claimed that the 47-year-old was set to stand down.
The Paraguay football federation (APF) announced on Thursday they had given the former coach of Newell's Old Boys three weeks to consider his future, and Martino moved quickly to confirm that he will be staying.
Martino, who only signed a new deal in February, told Paraguayan television station Canal 9: "For me, it has been five months that the new contract has already been in order.
"However, after the Copa America a cycle will come to an end and I will leave my post."
Paraguay topped Group F at the World Cup finals, which also contained Italy, Slovakia and New Zealand, and beat Japan on penalties in the second round before going on to lose against Spain.