The Portuguese Football Federation (FPF) will keep Fernando Santos as the head coach of the national team - even though their performance at the FIFA World Cup in Russia "fell short of expectations."
Portugal finished runners-up in Group B only to be eliminated from the tournament after losing 2-1 to Uruguay in the Round of 16.
"Everything has to go according to the plan - we decided to extend the contract of Fernando Santos till 2020 after our victory at Euro 2016," said FPF President Fernando Gomes.
"It was a well-considered decision. We understood all the perspectives and analysed the problems, when we were making this decision. We took into account the fact that the World Cup would take place in 2018," he said, as quoted in Portuguese daily A Bola.
He added that the UEFA Nations League kicks off in September, which will be followed by the Euro 2020 qualifiers, and as Portugal are the reigning European champions they have to work hard to defend their title.
After taking charge of Portugal in 2014, Santos led the team to their first European triumph in 2016 and the third place at the 2017 Confederations Cup.