Fergie promised £100m in move to assure Rooney
Rooney openly questioned the club's ambition when publicising his desire to leave Manchester United on Wednesday, but following meetings between the player, his representatives, Ferguson and chief executive David Gill, United announced on Friday that the striker had performed a sensational U-turn.
Rooney said: "I'm signing a new deal in the absolute belief that the management, coaching staff, board and owners are totally committed to making sure United maintains its proud winning history."
It is understood that Rooney was reassured funds would be made available by the Glazer family, and that Ferguson could have a minimum of £100 million at his disposal, despite the burden of debt carried by the club as a result of the Americans' takeover.
Ferguson has often repeated his desire to find "value" in the transfer market but now he will have the funds to embark on a more ambitious transfer policy, and one that would rival the likes of Chelsea and Manchester City.
It is also understood that the prospect of joining Manchester City concerned the striker, and that he had few alternatives. Chelsea would not pay superior wages to those offered by United, Barcelona did not have the financial clout and Real Madrid were happy with the options already in their squad.
Rooney therefore took the decision to commit his future to United, where he will be paid a basic wage of £150,000 per week. However, if performance targets are met by the club then Rooney's wage could in effect reach £200,000.