Lampard will now be available to Manuel Pellegrini’s men in both domestic and European campaigns for the rest of the season.
Lampard is also available for today’s clash against Sunderland.
Lampard, 36, has effectively been on loan at City for the first part of the season from sister club New York City, but that arrangement was due to end last night. However City and sister club New York City confirmed last night that Lampard will stay in Manchester, and will not be joining the New York City FC’s squad for the beginning of the MLS 2015 season.
Director of Football for NYC FC Claudio Reyna said: “Frank is a star and it is no surprise that Manchester City is rewarded by his contributions on the field every single day. He is eager to get to New York once his commitment ends in England.”
Lampard’s continued availability to City is even more important as they look to stay within Financial Fair Play rules.
Pellegrini is keen for defender Martin Demichelis to sign a new contract at the Etihad Stadium. The 34-year-old Argentina international’s current deal expires at the end of the season. The former Bayern Munich centre-back has become a key member of Pellegrini’s rearguard after a shaky start to his City career.
Pellegrini said: “He will finish his contract at the end of the season. I think he’s a very important player for us and I hope that he will start soon his talks about a new contract — and that they will conclude in the right way.”
Talks are still ongoing with another player Pellegrini hopes to re-sign, midfielder James Milner.
But Pellegrini has downplayed reports linking the club with a January move for Swansea striker Wilfried Bony.
City have been short up front during December due to injuries to all three of their senior strikers; Sergio Aguero, Edin Dzeko and Stevan Jovetic.
That has led to speculation the club — who allowed another striker, Alvaro Negredo, to join Valencia in August — could seek reinforcements in the forwards department, with Bony a possible target.
But any move for the Ivory Coast international, who has scored eight goals this season, would be complicated by the fact City currently have no more room to register non-homegrown players in their squad.
Further changes to the squad would therefore be necessary and — with additional European Financial Fair Play restrictions in place — Pellegrini has indicated there is unlikely to be much movement.
The Chilean said: “I think that is just one of the 20 or 30 names I have read from the beginning of the season until today that we are (supposedly) interested in.
“I don’t think we are going to be too busy in this window. We have restrictions about the amount of money and about the number of players we can put in the Champions League, so I don’t think it will be a special transfer window for our team.”
Bony would also not be available immediately because, like international team-mate Yaya Toure, he is due to play in the African Nations Cup.
City are expecting to lose the services of midfielder Toure after their FA Cup third round tie with Sheffield Wednesday on January 4.
Pellegrini said: “Yaya must go on January 5. He can play this week — tomorrow and on Sunday.”
Captain Vincent Kompany, however, remains on the sidelines after hamstring and calf problems and is unlikely to face Sunderland or Wednesday.
Pellegrini said: “I don’t think Vincent will be fit this week. Maybe next week against Everton (on January 10), he will be available.”
The champions will also be without strikers Sergio Aguero and Edin Dzeko until later in January.
Sunderland head across the Pennines without midfielder Liam Bridcutt, who suffered concussion in Sunday’s 0-0 draw at Aston Villa, but relatively satisfied with their opening 19 games.
Head coach Gus Poyet said: “We are okay. I think we should be a bit better off because we have had too many draws, no doubt. We feel better, the team feels better, but we need to improve, we need to keep getting better.”