Bilic to stay on as Croatia coach
Bilic had initially planned to step down after the World Cup campaign when his contract expired but reconsidered his decision because of the support he received from players, the football federation and pundits.
He will sign a new contract next week.
"We're happy with this development," FA president Vlatko Markovic said after the executive committee approved his proposal that Bilic continue in the post.
Bilic took over after the 2006 World Cup and led Croatia to the quarter-finals of Euro 2008.
Plagued by injuries and poor form of key players, Croatia finished third behind England and Ukraine in their World Cup qualifying group and will miss next year's finals in South Africa.
"There will be few changes in the squad and we're looking forward to the qualifying campaign for Euro 2012," Bilic said.
Details of the contract were not revealed but the FA said it would be unchanged.