Rooney becomes Britain's best-paid teenager

Wayne Rooney ended the speculation surrounding his Everton future by signing a new long-term contract at Goodison Park last night, ignoring the advances of some of Europe's finest clubs.

The 17-year-old agreed a deal that will keep him on Merseyside for the next three years. Although Everton were relieved to secure his signature, the deal represents a climbdown for the club, given that they had wanted Rooney to sign for six years.

Rooney's wages will be in the region of £500,000 a year. He will receive a signing-on fee and money from image rights (which had been the final sticking point), making him the highest-paid teenager in the British game.

The issues over Rooney's basic wage and bonuses were sorted out in three separate meetings over the past two weeks as Everton sensed the need to settle. The past couple of months have been anxious for Everton as the youngster has been on a scholar's contract and could have left at any time. A tribunal would then have been called to assess his value.

The contract, which will be backdated to his 17th birthday last November, should see Rooney earn about £6.5m by the end of the deal. He will have rises written into his contract based on appearances and by the end of his deal he could be earning about £40,000 a week.

The contract may seem huge, but there was a possibility that Rooney could have walked out of Goodison Park and joined a leading overseas club. Real Madrid had been interested in an option on him, while Internazionale were snubbed by the Rooney camp in the past few days after making contact.

Rooney, making a rare public appearance in front of a microphone, said last night: "I'm delighted. It's a dream come true really. It means a lot and I can't explain it."

Another Everton youngster, Tony Hibbert, has also signed a deal which will keep him at Goodison Park until 2006. David Moyes, the Toffees' manager, said: "I didn't realise how exceptional the talent was – and also to find another player in Tony, who has done extremely well. We're really pleased."

Moyes hailed Rooney's "wonderful strength, pace and ability to go past people" and added: "Give us a bit of time to develop him and England should have a future star in the making. It breaks my heart as a Scotsman to say that, but it's a fact."

Bill Kenwright, Everton's deputy chairman said: "We have secured the signatures of both players, and we're delighted to be able to announce that. Over the last couple of years this club has seen several promising youngsters depart, so it's particularly pleasing to announce the signing of what we believe to be two major young talents. We hope they will be here for many, many, many years. The fact the two players are both Evertonians has been inspirational to everyone at the club. It's a very important day for the club. Tony has had an excellent year, coming through to be a first-team regular. Wayne speaks for himself."

Kenwright joked about the Rooney deal: "Unfortunately you can only sign a 17-year-old for three years – we tried 33 and a half."

Everton are also trying to sign Kleberson, the Brazilian World Cup winner, on loan for the rest of the season after the collapse of his proposed move to Leeds United. Talks have begun between Everton and Atletico Paranaense aimed at bringing Kleberson to Goodison on loan with a view to a permanent £3.5m transfer.

Leeds had to call off the Kleberson transfer because Robbie Fowler's proposed move to Manchester City fell through, leaving them without the available finances.