Real Madrid midfielder, Xabi Alonso, renewed his contract with the Los Blancos until 2016 yesterday.

The 32-year-old, whose contract was due to expire in June, and who had been rumoured with a move to Chelsea, the two Manchester clubs or even a return to Liverpool, has now extended his commitment with Real for further two years.

The rumours had increased to a level that Real coach, Carlo Ancelotti, had regularly encouraged the club and the player to agree new terms, and Bernabeu fans chanted “Alonso stay” during recent games.

Alonso himself announced he was staying via Twitter, saying “This will continue to be my home for two more years. A pleasure to let you know. Very, very happy ¡¡Hala Madrid!!”

Madrid also released a statement on their website with more details of the agreement that ties the Spain international to the La Liga giants for the next two years.

“Real Madrid communicates the extension of the contract linking Xabi Alonso with the club for two more seasons, until June 30, 2016,” the statement said.

“The player will talk in front of the media next Friday Jan. 10 at the Estadio Santiago Bernabeu's press room at 13.30.”

Xabi Alonso joined Real Madrid in summer 2009 for €30m after winning the Champions League and the FA Cup with Liverpool.

Since joining Madrid, he played 204 games for the club and won one La Liga title, one Copa de Rey and one Spanish Super Cup.

The new contract is reported to be worth €6m a year after tax, and includes a possibility to extend for another 12 months should both parties wish to do so.

Do you think it is the right decision by Alonso or would you have liked to see him move? Have your say in the comment section below.