Manchester United's hopes of signing Karim Benzema look to have ended after Lyon announced that the striker has agreed to extend his contract.

The French champions aim to secure the highly-rated 20-year-old's services until 2010, ending speculation that he will be on his way to the Premier League at the end of the season.

Lyon president Jean-Michel Aulas said: "We shook hands 48 hours ago. We have an agreement with Karim. Now we have to reach one with the people who advise him.

"There is no doubt that Karim will still be with us next season but my ambition is to keep him at Lyon until the 2010 World Cup."

Aulas said that full details of the deal would be announced next week.

Benzema is one of the most highly-coveted young talents in European football

He has already scored 20 goals in 26 appearances this season, including one in the Champions League against Manchester United.

The France international has previously stated his preference to move to Spain or Italy if he ever leaves his hometown club.

Tony Mabert / Eurosport