Kelly first joined Leicester as an apprentice in 1981 and is now in charge

Kelly has signed a one-year rolling contract after guiding the Foxes to seven wins and three draws since taking over from Craig Levein in January.

He told the club's website: "I'm very flattered to be offered the position and delighted to accept it."

In the Walkers Stadium boardroom, Andrew Taylor has replaced Jim McCahill as executive chairman.

The Foxes were three points inside the Championship relegation zone when Kelly took over but are now 13 points clear and safe.

Kelly said: "The first brief was to preserve our Championship status, which we have achieved quicker than we dared hope for.

"We have shown in the last three months that we can compete successfully and that must be our aim next season on a consistent basis.

This decision was the only one in the eyes of the supporters From David Have your say on 606

"It's a very exciting time but also a very challenging one. I can assure all Leicester fans that I, my team and the players will do everything possible to bring success to the club."

Taylor, who has been Foxes fan for more than 30 years, was previously chairman and chief executive of McDonald's UK and will assume the chairmanship on June 1.

He said: "It is a great honour to become chairman of the club I have supported since I was a student and I'm delighted to announce Rob has agreed to become our next manager.