Frank Lampard has elected to stay with City, after the midfielder's contract was due to expire at midnight on December 31.
Officials at Manchester City and New York City FC, along with the player himself, have finally agreed an extension.
The deal has now been ratified by the Premier League, meaning Lampard will be able to continue playing for the Blues in both domestic and European competitions.
Lampard was provisionally named in Manuel Pellegrini's squad for the New Year's Day game against Sunderland, but the champions were preparing to pull him out if clearance did not come through.
The City manager had expressed his desire to keep Lampard at the Etihad after producing some great performances, while notching up six goals in the first half of the campaign.
Lampard is seen as essential cover for Yaya Toure, who flies out on Monday to join up with the Ivory Coast squad ahead of the African Cup of Nations, making the extension even more important.
