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 Football Association are 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."

Eriksson, whose team face 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 newspaper 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.

NO OFFER

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 close he had come to reaching an agreement with Chelsea.

"I was just listening. I think when clubs are coming to you, if you have ambition, you listen to other jobs."

He added he had no regrets about speaking to Chelsea.

"No," he said. "I can't regret that because if you have ambition in life, you listen to other jobs as well, if it's a possibility or not.

"I think I should be allowed to do that, even if you are England manager."

Palios said he was not surprised Eriksson had been approached by other clubs.

PURELY SOCIAL

"I think we have to be realistic with regards to the fact that he is a top manager," he said.

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.

Chelsea fans responded on Saturday by waving banners of support for their manager, who got a standing ovation when he walked out before the home game against Wolverhampton Wanderers.

One of the banners read: "Ranieri to stay -- we don't need the Swede."

Eriksson said heightened media speculation had forced him to come to an agreement with the FA earlier than he had planned.

"In an ideal world, I would maybe have waited until after Euro 2004, but I think that would have been almost impossible with all the speculation going on," he said.

"It's best what we've done. I'm sure this will end the speculation."