Martin Jol has revealed Fulham had approached him to activate the clause in his contract that would see him stay at Craven Cottage until 2014.
Cottagers boss Jol confirmed he and the club held talks "a month ago or so" about extending his time in charge beyond the end of the season.
The Dutchman joined Fulham in the summer of 2011 on a two-year contract with an option of a third year.
He led them to their second highest ever Premier League points total of 52 in his first year in charge as they finished ninth.
They are currently on course to better that and lay eighth ahead of Saturday's trip to Arsenal.
"I'm happy to stay," Jol added.