Terry: Totally committed to Chelsea
Terry had been a target for Manchester City, with local media speculating that they had offered him a salary of 200,000 pounds per week after making a bid of around 30 million pounds.
The 28-year-old centre back and club captain remained silent on the issue despite City manager Mark Hughes regularly confirming his interest and British newspapers ramping up the speculation.
He finally made a statement on the club's website on Sunday saying: "There has been a lot of speculation recently about my future and I want to clear this up once and for all.
"I am totally committed to Chelsea and always have been.
"Chelsea have also made it clear to me consistently that there was never any intention to accept any kind of offer.
"When you are linked with any club, or with a manager who I have huge respect for, it will always make headlines but me leaving Chelsea was never a possibility.
"I know there has been comment that I should have made a statement earlier. However, throughout this period there have been numerous discussions between myself, the owner and the Chelsea Board and we all agreed that the timing of any statement would suit everyone involved in those talks, not any outside influences or agendas.
"What is clear to me following those discussions is that Chelsea's ambition remains as high as ever. This has been further proved by the appointment of (manager) Carlo Ancelotti. I am certain that he will take this club on to the next level.
Terry joined Chelsea as a trainee in 1997 and is hugely popular with the west London club's fans.
He had the chance to secure the Champions League title in 2008 but slipped and missed what would have been the decider in a penalty shoot-out against Manchester United, who went on to win it.
Despite winning domestic honours galore, the Champions League is, probably because of his Moscow failure, desperately close to Terry's heart.
"Another important factor was knowing that Chelsea would be securing key current players for the long term. The strengthening of the squad around this core is crucial to pushing us onto greater success," he said.
"I am as committed as ever to helping drive Chelsea forward and I will be proud to lead the team for as long as I can."
Ancelotti said earlier this month that he considered the centre back to be a "symbol of the club" and that no price would be enough to take him from Stamford Bridge.