AC Milan head coach Gennaro Gattuso has signed a new three-year contract, the Serie A club have confirmed.

The 40-year-old has agreed to fresh terms that will reportedly see his wages increased from the €120,000 salary he has had since making the step up from the Primavera team.

It is also claimed Gattuso will have a say in the club's transfer plans for next season as part of the agreement.

Milan made the announcement live on their official Facebook account, with managing director Marco Fassone confirming a three-year deal for Gattuso.

He said: "Rino Gattuso will be the coach of AC Milan for the next three years, and one of the most important decisions that I and [Massimiliano] Mirabelli have made during this period."

Gattuso's new deal is a reward for Milan's improvement on the pitch since he was appointed as coach following the departure of Vincenzo Montella in November.

The Rossoneri have won nine of their 16 Serie A matches under the former Italy midfielder, although they missed the chance to close the eight-point gap to Inter in fourth with Wednesday's 0-0 derby draw at San Siro.

They suffered a 5-1 aggregate defeat to Arsenal in the last 16 of the Europa League but overcame Verona, Inter and Lazio to reach the Coppa Italia final, where they will meet Juventus.