Dusan Ivkovic is to remain as the coach of Serbia at least until 2013, the president of country's Basketball Association (KSS) Dragan Djilas announced on Thursday.
Djilas recently travelled to Athens to meet with the veteran coach, who led Serbia to a silver medal at EuroBasket 2009 and to a fourth-place finish at the 2010 FIBA World Championship.
Ivkovic did not have success this summer at the EuroBasket in Lithuania, with the Blues not achieving a top-six finish to book a place at the FIBA Olympic Qualifying Tournament, but the federation has convinced him to remain in charge.
"We didn't have any dilemmas about our wish to keep Ivkovic as our head coach," Djilas said.
"The KSS management has a firm attitude that coach, whoever he is, can't lose our support just because of one, single disappointment.
"Yes, we wanted a better result from our senior team in 2011, but we can't and won't forget Ivkovic's past results and his huge contribution to Serbian basketball."
Ivkovic has been coaching for a long time and everyone wondered if would want to continue because of his age.
"There was not a clear doubt, just a question - since Ivkovic is 68-years-old - is the age problem for him to continue to work as Serbian head coach," Djilas said.
"But, if he can successfully lead one great club as Olympiacos is, there's no doubt he can be at the helm of our national team."
As part of his new contract, Ivkovic will guide Serbia in their qualifying campaign for EuroBasket 2013, which is to be held in Slovenia.
They will take on Israel, Montenegro, Estonia, Slovakia and Iceland.
"As KSS, we are here to provide everything that our national team needs to reach its goals," Djilas said.
"Yes, we want to play at EuroBasket 2013 and, yes, we want a great result in Slovenia.
"We have quality, and I know we have and will have support from our fans, and, our players, too.
"In fact, every single player that represented Serbia at the FIBA European Championship 2011 in Lithuania confirmed his participation in the forthcoming qualifications."
Serbia won their first four games at the EuroBasket but then lost in overtime to France.
They lost six of their last seven games and ended up eighth.
On Sunday, before Ivkovic had been confirmed publically as the Serbia coach, he looked ahead to the draw for the EuroBasket and played down the belief that his national team would be favorites to top their group.
"The Italian experience can be used as an example," Ivkovic said.
"They were favorites in our group back then in 2008, but they didn't qualify for the EuroBasket."