The decision comes after the Italian’s future was placed in much doubt on the back of EnglandÃ¢â‚¬â„¢s disastrous World Cup campaign in South Africa.
England crashed out in the last 16 to Germany in a humiliating 4-1 defeat but the 64-year-old has been backed by The FA.
Sir Dave Richards, the Club England chairman said: Ã¢â‚¬Å“We are all still extremely disappointed at our performance in South Africa, and we believed it was important that we took some time to reflect on everything in a calm and considered manner back in England.
“After fully discussing our performance we remain convinced that Fabio is the best man for the job.
Ã¢â‚¬Å“He went into the World Cup with a reputation as one of World footballÃ¢â‚¬â„¢s finest managers and we are confident Fabio will benefit from his first international tournament experience and this will undoubtedly make us all stronger for the Euro 2012 campaign.Ã¢â‚¬Â
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