Real Madrid target David Villa, the top scorer at Euro 2008, has ended speculation about his future by extending his contract with Valencia until 2014, the Spanish first division club said Wednesday.
"The best striker in Europe will remain at Valencia," the club's president, Vicente Soriano announced.
The Internet site of sports newspaper Marca said Valencia would make the 26-year-old the best paid player in their history, with an annual salary of more than three million euros.
Villa's contract was extended by one season from 2012-2013 to 2013-2014.
"I am grateful to Valencia for this gesture and for all that (the club) has given me and to Vicente Soriano for the effort he has made," Villa said.
The news is a further blow to Real Madrid, who were looking for a possible replacement for Brazilian striker Robinho who has said he wants to join Chelsea.
The Spanish champions on Sunday reportedly offered 45 million euros for Villa, who was the top scorer with four goals at Euro 2008, which was won by Spain.
Earlier Wednesday, another Real target, Spanish international Santi Cazorla, announced he had renewed his contract with Villarreal.
And Real also failed in their bid to recruit Manchester United's Portuguese playmaker Cristiano Ronaldo.
Earlier this month, Valencia's other star striker, David Silva, a target of several top European clubs, also announced he would remain at the club.
Valencia, Champions League finalists in 2000 and 2001, finished just tenth in the Primera Liga last season and only qualified for the UEFA Cup thanks to a Spanish Cup victory.
European Champions League third qualifying round, second leg results on Wednesday:
