Republic of Ireland international Richard Dunne has signed a new three-year contract with Manchester City, extending his stay at Eastlands until the summer of 2009.

The Dublin defender, who has been voted the club's Player of the Year for the last two seasons, is delighted the club has shown faith in him.

"It's terrific news," he said. "I'm very settled here and I believe the club is going in the right direction.

"I think we've got a great nucleus of a squad to progress next season and I'm really looking forward to the new campaign already."

The contract marks an about turn for the defender who, having joined from Everton in 2000, was on the verge of being kicked out of the club by then manager Kevin Keegan following a succession of disciplinary incidents.

Keegan, though, afforded Dunne a final chance and despite those issues, not to mention losing his place in the side, the 27-year-old showed tremendous character to fight back and resurrect his career.

Dunne is now a regular in the Irish team and, indeed, was one of Steve Staunton's better performers during Wednesday's disappointing 1-0 international friendly defeat to Chile at Lansdowne Road.

Danny Mills, though, has been told he can leave the club.  The 29-year-old still has three years left on his contract but is deemed surplus to requirements by City boss Stuart Pearce.