The 37-year-old's decision to stay at Arsenal until 2008 will disappoint Bundesliga side Hertha Berlin, who had been favourites to seal his transfer at the end of this season.

"I am going to stay an extra year," said Lehmann, who has been at the Gunners since signing from Borussia Dortmund in 2003.

"Arsenal is a great club with a good sporting outlook and I want to play in the Champions League next season," added Lehmann, who was sent-off early on in last season's Champions League final which Arsenal lost to Barcelona.

The fiery goalkeeper, who previously had spells at Schalke 04 and AC Milan, had wanted a two-year extension but Arsenal coach Arsene Wenger only offers one-year extension to players aged over 30.