Kevin Pietersen will remain with Surrey for the 2014 season, the English county announced Monday.
England controversially called time on star batsman Pietersen's international career last week after he was omitted for reasons of team morale from the squads for the upcoming tour of the West Indies and the World Twenty20 in Bangladesh.
However, Surrey director of cricket Alec Stewart, a strong supporter of Pietersen throughout the furore, had no qualms in retaining the services of his fellow former England captain for a revamped domestic Twenty20 season of 14 matches.
Pietersen, though, said he would also be available for first-class County Championship matches as well. "BTW (By the way) — this is a T20 contract, but I can play in the County Championship too," tweeted Pietersen.
Stewart hailed the new contract as "good news" for the English domestic game where an expanding international schedule means leading England players are rarely seen on county duty.
"We are delighted to have agreed terms with Kevin, and to have a player of his ability at The Oval," said Stewart in a club statement.
"Unsurprisingly there was a great deal of interest in Kevin from around the world, but he has made it very clear that he wants to play at Surrey and it is not only good news for the club but for the domestic game in this country," he added.
"We are now looking forward to watching him in the middle, scoring a bucket load of runs for Surrey."
Pietersen, whose stunning maiden Test century of 158 against Australia that secured England's 2005 Ashes win was made at The Oval, said: "I'm absolutely delighted to have agreed terms with Surrey and am thoroughly looking forward to playing my cricket for the club this summer.
"I've had some of my best moments in cricket at The Oval and I'm really excited at the prospect of getting back out there playing in what will hopefully be a brilliant summer for us all at Surrey."
In a joint statement with Pietersen last Tuesday, the ECB cited only the need for a new "team ethic and philosophy" following the 5-0 Ashes thrashing in Australia as the reason for their decision to axe the South Africa-born batsman.
But that led officials to be criticised severely by the likes of ex-England captains Ian Botham and Michael Vaughan for both banishing Pietersen and failing to say precisely why such drastic action was required. Clearly stung the ECB, this time with England's Professional Cricketers' Association, issued another statement on Sunday.
While Pietersen had "played some of the finest innings ever produced by an England batsman," the new statement also said England captain Alastair Cook needed to be sure he had the "full support" of his team with "everyone able to trust each other".
"It is for those reasons that we have decided to move on without Kevin Pietersen." Pietersen, 33, bowed out as England's record scorer across all formats of the game, with 13,797 runs to his name.
However, his strong personality made him a divisive figure in the dressing room. He fell out with two head coaches in Peter Moores and Andy Flower and was also briefly dropped in 2012 after it emerged he'd sent text messages criticising then England captain Andrew Strauss to South African players.
Strauss, speaking before the ECB explained its reasons for jettisoning Pietersen, said: "The smoking gun is the total absence of trust."
But former England captain Michael Atherton insisted some of Pietersen's erstwhile team-mates were also to blame for the breakdown, saying the shotmaker was "fundamentally friendless" among such senior players as Cook, James Anderson, Stuart Broad, Matt Prior and Graeme Swann.
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