"We're delighted we've been able to take this decision with Ottmar Hitzfeld so quickly and easily," Bayern director Uli Hoeness told a press conference.

"It was a mutual decision to make the new contract just for one year. In due course we'll review the situation and agree on whether to extend it into the middle or long term."

The veteran manager returned to his former club in February after the sacking of Felix Magath in a bid to save Bayern's domestic campaign.

Hitzfed, who led Bayern to Champions League triumph in 2001, initially planned to leave his post after the season's end but had a change of heart lately.

"Over the last few weeks, I've recognized how much enjoyment I derive from coaching, and I believe the team and I can still achieve a few things," Hitzfeld said.

"This was an important reason for me to remain as FC Bayern Munich head coach."