Michigan head coach Jim Harbaugh watches from the sideline in the first half of a game on Sept. 7, 2019 against Army, in Ann Arbor, Mich. (AP Photo/Tony Ding, File)

ANN ARBOR (AP) — Michigan has decided to stick with coach Jim Harbaugh, finalizing a new, five-year deal that cuts his guaranteed compensation but gives him an opportunity to make up for the financial loss if he can start winning championships.

The school will pay him $4 million in 2021 with a chance to make nearly $8 million in the fifth year of his contract, according to the memorandum of understanding signed by Harbaugh and athletic director Warde Manuel on Friday.

Harbaugh can make $1 million for winning the Big Ten title and another $1 million for winning the national championship along with other bonuses he will earn if he can improve the team’s success on the field.

“My thanks to athletic director Warde Manuel for the trust that he has shown in allowing me to continue to coach the University of Michigan football team, and to President Mark Schlissel and the Board of Regents for their ongoing support,” Harbaugh said.

The deal ends months of speculation about Harbaugh’s future. He could have potentially returned to the NFL or the school could have cut loose a coach with one year left on the seven-year contract paying him about $7 million per season that he signed after leaving the NFL.

“I continue to believe that Jim is the right man to lead our program in pursuit of Big Ten and CFP championships,” Manuel said. “Our program didn’t achieve at a level that anyone expected this year but I know those setbacks will drive the coaches, players and staff moving forward.”