Barnsley narrowly avoided relegation from the Championship as the season ended in dramatic fashion on Saturday.
The Tykes played out a pulsating 2-2 draw with Yorkshire rivals Huddersfield Town which ensured that both sides stayed up at the expense of Peterborough United.
Flitcroft stated after the match that he wanted to stay with the club but admitted there was still work to do to finalise a new deal.
His contract expires this summer but it is understood that an agreement has now been reached for the 39-year-old to stay on permanently, along with his backroom staff.
Flitcroft joined Barnsley as assistant manager in 2011 and then took charge on a caretaker basis following the sacking of Keith Hill in December last year.
He was appointed boss after winning two matches out of three and went on to keep Barnsley in the second tier.