Wilson relased the decision in a three-paragraph statement after meeting with Jauron on Tuesday near the owner's home in suburban Detroit. No details of a contract were given, and Wilson did not say whether Jauron received an extension beyond next season.
Jauron, in the final year of a three-year contract, coached the Bills to a third consecutive 7-9 record, a disappointing finish for a team that opened the season at 5-1.
"It is well known that I share many of the fans' dissatisfaction with our offensive game management," Wilson said. "That being said, I believe that this team, at this time, is better served by continuity in the coaching staff rather than a disruptive overhaul. The team played hard all year long and there are many positives to build on. This is not to say that we will be complacent. In my discussions with Dick and our senior football people the issues are recognized and I am confident they will be addressed.
"I believe in the last few years we have gotten close personnel wise and look forward to another strong draft, more assertive veteran leadership and continued improvement from our young quarterback."
Jauron also met with Bills chief operating officer Russ Brandon at the team's Orchard Park headquarters, a person familiar with the meeting told The Associated Press. Jauron and Brandon then flew together to Detroit, said the person, who spoke on condition of anonymity because he was not authorized to discuss it.
Buffalo's season ended with a 13-0 loss to New England on Sunday. In losing eight of their final 10 games, the Bills went 0-6 against their AFC East rivals and failed to make the playoffs for a ninth consecutive season.
Jauron has been the target of heavy criticism for the Bills' meltdown, and was particularly faulted for the team's numerous on-field blunders. The Bills earned a reputation for botching scoring opportunities this season, including a blown chance at a field goal before time ran out in the first half against New England.
In quarterback Trent Edwards' first season as a full-time starter, the offense scored 10 more touchdowns than last year and gained 4,882 yards -- the most since 2002. On defense, the unit allowed nearly 600 fewer yards than last year and in seven games held opponents to 16 or fewer points.
The Associated Press contributed to this report