Joachim Loew has reached an agreement to extend his current contract as coach of Germany's national soccer team for another two years.

German Football Federation (DFB) President Theo Zwanziger said he was pleased the two sides had "shaken hands" on the contract extension.

"We respect the efforts of the national coach," Zwanziger said.

The contract extension will not come cheap: Loew's pay packet looks set to increase by about 20% to around three million euros annually.

Looking ahead to Euro 2012

The move means Loew will still be in charge when Euro 2012 rolls around. His first contract would have seen him stay as head coach until just after the World Cup in South Africa next year.

"There is the fundamental readiness to continue our work until after the 2012 Euro," said Loew in a statement on the DFB web site.

"Until the signing of the contract, some points need to be discussed and cleared, which are important for the work of my team," he added.

Loew wishes to retain his current coaching team, and Zwanziger has confirmed the DFB agreed in principle to extend the contracts of assistant coach Hansi Flick and goalkeeping coach Andreas Koepke.

Loew, who took over from former coach Juergen Klinsmann in 2006, guided Germany into the final of Euro 2008, where they lost to Spain. Under his watch, Germany also finished top of their qualifying group for the 2010 World Cup.

ca/mrh/dpa/AFP/Reuters

Editor: Sean Sinico