Saban, 62, led the Crimson Tide to the national championship three times in the last four years and had them in position to play for another title this season until they suffered a shocking setback to Auburn in the final game of the regular campaign.
He had been part of the speculation concerning a possible change of coaches at the University of Texas, but Alabama school officials said Friday Saban had agreed to a further extension of his contract. There was no immediate word from the school as to how long the extension will be, but the Tuscaloosa News reported it was for six years.
Saban came to Alabama in 2007 and since then the school has produced a 79-14 football record. National titles came at the end of the 2009, 2011 and 2012 seasons.
Alabama (11-1) will meet Oklahoma in the Sugar Bowl on Jan. 2.
Prior to his arrival in Tuscaloosa, Saban coached at Toledo, Michigan State and LSU.