Relegation was confirmed even after a 3-0 win over Leeds United on Sunday. The club finished 18th, two points behind 17th-placed Tottenham Hotspur. They will compete in the Championship next season alongside Wolverhampton Wanderers and Burnley.
Following the drop, West Ham had considered dismissing Nuno, with a contractual break clause available. He declined to comment on his future after the victory over Leeds.
The manager was reportedly summoned to a crisis meeting at the London Stadium on Monday morning to discuss his position. He is now expected to remain in charge and lead the club’s push for an immediate return to the Premier League.
"The football operation always has to be our first priority and the planning for next season started as soon as the final whistle sounded on Sunday," a statement from the club read.
"We held meetings with Head Coach Nuno Espirito Santo early this week and are pleased to confirm that he has expressed his continued commitment to the Club - as we have to him.
"Nuno made it very clear that he is highly motivated for the challenge of guiding West Ham United back to the top flight at the first time of asking. That must be the unquestionable goal for next season.
"Nuno has spent one previous year in the EFL Championship and it was an outstanding success as he secured 99 points to win the title with Wolverhampton Wanderers in 2018.
"While the ultimate outcome on Sunday was a painful one, the Board of Directors believe that there have been broader signs of improvement and progress in recent months, and we want Nuno to continue developing that progress.
"A total of 25 points taken from our final 17 Premier League matches equated to 1.47 points per game - a ratio that would have resulted in a seventh-place finish across the full season.
"Furthermore, we feel the clear improvement in squad mentality and togetherness since January, leading to that upturn in performances and results, makes him the right man to lead us forward."
Howard Webb has defended the controversial decision to disallow West Ham a late equaliser against Arsenal, insisting VAR made the correct call after identifying a foul on goalkeeper David Raya during a stoppage-time corner at the London Stadium.
A late VAR intervention dominated discussion after Nuno Espirito Santo criticised the decision to disallow what would have been a dramatic equaliser in West Ham's 1-0 defeat to Arsenal.
Mikel Arteta praised the officials for making a "big call" after VAR ruled out Callum Wilson's late equaliser to secure Arsenal a dramatic 1-0 victory over West Ham United on Sunday.
Arsenal kept their Premier League title charge on course with a 1-0 victory over West Ham on Sunday, although the result was overshadowed by controversy after West Ham had a late equaliser ruled out.
