Under Karl, the Nuggets have enjoyed their best stretch since joining the NBA in 1976. He was hired Jan. 27, 2005, and has led the team to a 76-46 regular-season record and .628 winning percentage.

``As we've said all along, we're committed to building a championship-calibre team,'' said team owner Stan Kroenke. ``We believe today's announcement, coupled with the moves we've made throughout the off-season, will take us closer to achieving our ultimate goal.''

The Nuggets went 32-8 in 2004-05 after Karl's hiring and they won their first divisional title since 1987-88 last season despite a spate of injuries to their frontcourt.

This off-season, the Nuggets signed Brazilian forward Nene and star Carmelo Anthony to big contracts. Anthony signed a US$80-million, five-year extension and Nene signed a $60-million, six-year deal.

``This franchise is moving in a great direction and I'm honoured to be a part of it,'' Karl said. ``I look forward to continuing what we've started.''

Karl has 784 wins in his 18-season career, which has included jobs at Milwaukee, Seattle, Golden State and Cleveland.