Carlo Ancelotti has signed a new deal at Milan, and in the process, quelled speculation about his future at the club.

The former Parma and Juventus coach has been linked with a move to Real Madrid in recent weeks, but the new one-year extension to his deal will keep him at the club until 2008.

“Carlo Ancelotti will continue to coach AC Milan at least until June 30, 2008,” Milan said in an official statement.

Ancelotti was happy to pen the new deal.

“I’ve signed until 2008 and I’m happy,” said Ancelotti.

“There was a temptation with regard to Real Madrid, but I have preferred to stay where I am with Milan.”

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