Sven-Goran Eriksson will leave his job as England coach after the World Cup in Germany this summer.
The announcement, made by the Football Association on Monday, means Eriksson will leave two years before the end of his contract, after six years as coach.
Eriksson stressed he was still committed to leading England to victory in the World Cup to be held in Germany.
He said: "I am happy we have reached this agreement and can now continue our preparations for the World Cup."
Eriksson's England career
January 2001 - Becomes England manager
September 2001 - England beat Germany 5-1 in a World Cup qualifier
October 2001 - England qualify for the World Cup with a 2-2 draw against Greece
June 2002 - England lose 2-1 to Brazil in the quarter-finals and are knocked out of the World Cup
October 2003 - England qualify for Euro 2004 with a 0-0 draw in Turkey
June 2004 - England lose on penalties to Portugal in the quarter-finals at Euro 2004
October 2005 - England qualify for the World Cup in Germany with wins against Austria and Poland
January 2006 - FA announce Eriksson will leave after the World Cup
The announcement came after two weeks of stories about Eriksson.
A newspaper reported he wouldn't be staying as England coach after the World Cup.
They also alleged that Eriksson made comments about some managers taking money they shouldn't when signing players - called bungs - which is against the rules.
Following the announcement the England coach said: "I care passionately about this job and I want everyone to know that.
"I have always enjoyed the incredible support of the fans and I know how important they will be to us in Germany."
Eriksson at the Football Association on Monday
On Monday night FA chief executive Brian Barwick said: "The FA and Sven felt it was important to clarify his future.
"There has been so much speculation surrounding this matter in recent weeks and months, it was important to resolve it now."
They went on to thank Sven for his help and support.