Arsene Wenger signed Denílson from São Paulo in 2006 PA Photos

Denílson has agreed to extend his loan spell at São Paulo, with the Arsenal midfielder now set to remain in Brazil until the end of the 2012-13 season.

The 24-year-old made 37 appearances for São Paulo after Arsene Wenger allowed the Brazilian to move on a season-long loan last summer.

Denílson began his career at São Paulo, winning the World Club Championship in 2005, before moving to The Emirates in a £3.4m deal in August 2006.

He scored 11 goals in 153 appearances for Arsenal and was part of the Gunners squad which lost the League Cup final in 2007 and 2011. He sealed a temporary return to Brazil last summer after failing to hold down a regular spot in Wenger’s first team.

“I’m very relieved,” Denílson told the club’s website. “I am very happy. Now I will be focused on bringing titles to São Paulo.”

Last week, São Paulo’s vice-president Joao Paulo de Jesus Lopes had underlined the club’s desire to keep the Arsenal midfielder, although he had hinted Wenger may not be willing to allow Denílson leave on another long-term loan deal.

“Arsenal’s staff want him to return but we are waiting for [director of football] Adalberto Baptista to have talks with them,” the vice-president told Globo Esporte.

“Maybe we will manage to extend the loan for six more months or even another year. They [Arsenal] liked his performances, they liked Denílson’s development. That’s why they want him to return.”

Denílson has captained Brazil at every junior level since he was a member of the Under-15 squad but he is yet to earn his first senior cap.