Pep Guardiola to sign new two-year deal at Bayern Munich?

Sought-after manager Pep Guardiola has reportedly decided to extend his stay at Bayern Munich by signing a new two-year contract.

The Spaniard has been heavily linked with both Manchester City and Chelsea, who are said to be deliberating on what to do with manager Jose Mourinho following six Premier League defeats in 11 games.

Guardiola, who will come to the end of his current Bayern contract next summer, is said to have held talks with City, who tied down current boss Manuel Pellegrini to a new deal before the start of the season.

However, according to Spanish newspaper Sport, Guardiola has opted to stay at the Allianz Arena for a further two years as he tries to guide the German giants to the Champions League crown.

The 44-year-old has won back-to-back Bundesliga titles during his time with Bayern, but is yet to taste victory in Europe after losing two semi-finals.

It is believed that Guardiola, who was linked to Manchester United following Sir Alex Ferguson's retirement in 2013, is determined to win the Champions League with Bayern before he moves on.