The Marseille boss has recently been linked with Premier League side Liverpool, but has decided to instead sign a new deal that will keep him at the French side until June 2012.
Marseille president Jean-Claude Dassier told the club’s official website: “I am very happy that Didier Deschamps has signed for another year.
“I’m on the same length of contract but that is not why I did it. I have done it in the major interest of the club.
“Liverpool was a serious matter but I always trusted Didier to stay with us.”