St Albans (England): England coach Sven-Goran Eriksson has ended speculation over a possible move to Premier League side Chelsea by agreeing to a two-year extension on his contract with the Football Association (FA).

The 56-year-old Eriksson, who had been contracted by the FA until the 2006 World Cup, will remain in charge until 2008, the FA said at a news conference on Sunday. “The FA is delighted that Sven-Goran Eriksson, the head England coach, has agreed to sign a new contract that will run until the summer of 2008,” the FA said in a statement.

The FA’s chief executive Mark Palios added: “This is excellent news for the England team, the millions of England supporters and also for everyone connected with the FA.”

Eriksson said: “I have always said that being coach of England is a great honour and I’m glad that we’ve been able to come to an agreement for me to extend my involvement with the national team.

“I will not leave after 2004. I have a contract until 2008.”

Eriksson, whose team faces Sweden in a friendly on Wednesday, had been closely linked with Chelsea manager Claudio Ranieri’s job since the club was taken over last July by Russian oil magnate Roman Abramovich.

A tabloid on Saturday ran a front-page picture of the Swede leaving the London flat of Chelsea chief executive Peter Kenyon, prompting FA officials to hold emergency talks with Eriksson later that day.

Speculation linking Eriksson with Chelsea has been growing ever since he was photographed entering Abramovich’s home last July. The Swede said the visit was purely social.

However, Eriksson denied at Sunday’s news conference he had been offered a job by the Premier League side. “Not close at all,” he replied, when asked how near he had come to reaching an agreement with Chelsea.