DENVER - The Nuggets exercised their three-year option on coach George Karl's contract, keeping him with Denver through the 2009-10 season.

Under Karl, the Nuggets have enjoyed their best stretch since joining the NBA in 1976. He was hired Jan. 27, 2005, leading the team to a 76-46 regular-season record and .628 winning percentage,

"As we've said all along, we're committed to building a championship-caliber team," team owner Stan Kroenke said Tuesday. "We believe today's announcement, coupled with the moves we've made throughout the offseason, will take us closer to achieving our ultimate goal."

The Nuggets went 32-8 in 2004-05 after Karl's hiring and they won their first divisional title since 1987-88 last season despite a spate of injuries to their frontcourt.

This offseason, the Nuggets signed Brazilian forward Nene and star Carmelo Anthony to big contracts. Anthony signed a five-year, $80 million extension and Nene signed a six-year, $60 million deal.

"This franchise is moving in a great direction and I'm honored to be a part of it," Karl said. "I look forward to continuing what we've started."

Karl has 784 wins in his 18-season career, which has included jobs at Milwaukee, Seattle, Golden State and Cleveland, tying him for 12th in NBA history.