Arsène Wenger has agreed a new two‑year contract at Arsenal, bringing months of uncertainly to an end that even he admitted was damaging to the club over this past season. There will be an announcement on Wednesday to confirm the news.

The manager, who has been in situ since the early weeks of the 1996-97 season, met the club’s directors on Tuesday, having demanded that they back him after Arsenal’s FA Cup final victory against Chelsea on Saturday and strong finish to the campaign.

Stan Kroenke, the majority shareholder, has stood firm in support of Wenger, even during the dismal run of form from the end of January to early April, when the team lost seven of 12 matches in all competitions. They did not recover sufficiently in the Premier League and, for the first time under Wenger, they missed out on the top four. The fifth-placed finish was good enough only for Europa League qualification.

Kroenke gave his backing to Wenger and the new contract was rubber-stamped at the board meeting. Kroenke, plainly, still believes that Wenger can, with the right set of circumstances, mount a challenge for the title – the winning of which would vindicate the second half of the manager’s lengthy tenure.

The positive finish to the season certainly helped to make the meeting run smoothly, although there has long been the sense that Kroenke was ready to stand by Wenger. The team won nine of their final 10 fixtures, including the Cup semi-final against Manchester City and the final against Chelsea.

During the 12-game slump, which included a damaging 10-2 aggregate defeat against Bayern Munich in the Champions League, Ivan Gazidis, the chief executive, pushed his “catalyst for change” agenda.

Gazidis has felt that certain structures and personnel around the manager needed to change and improve – such as the goalkeeper coach, Gerry Peyton – and, briefly, a power struggle flared, because Wenger was against some of the suggestions – most vociferously the notion of appointing a director of football. Wenger has also made sarcastic comments about the increasing use of analytics, which is something Gazidis has championed.

Wenger has zealously guarded his control over the technical side of the club but Gazidis would tell him that any changes would not undermine that in terms of team preparation or player recruitment. Gazidis, as ever, has had to play a diplomatic game. It is expected that the sporting director-type role would be aimed at relieving some of the pressure on Wenger in areas like logistics, medicine and analytics. It remains to be seen to which specific changes Wenger has agreed.

The main thing is that Wenger is staying; his current contract was set to expire on 30 June. Together with the board, he discussed pressing business such as budgets for next season and how to ensure that key players such as Alexis Sánchez, Mesut Özil and Alex Oxlade-Chamberlain stay at the club. All three are poised to enter the final season on their contracts.

Wenger admitted after the final game of the league season against Everton that “the psychological environment for the group of players was absolutely horrendous” at times. He blamed the uncertainty over his future, in part, for that. “For me the contract does not have a special meaning but, because of the debate, I should have sorted that out earlier,” he said, after the Cup final.