INDIANAPOLIS -- Tony Dungy isn't ready to leave.
"It was a family decision," Dungy said. "We're on board, and we look forward to '08, look forward to putting together a winner."
Team owner Jim Irsay said Dungy would stay at least one year and could stay longer.
"This isn't a victory lap for Tony," Irsay said.
It's the third straight year Dungy seriously considered retiring.
The debate focused on Dungy's desire to balance family and football, especially after his family moved back to Tampa earlier this month. His 16-year-old son Eric now attends high school there.
Irsay has said Dungy could spend Friday nights there watching his son's football games, but insisted the Colts job would be more than a part-time gig for Dungy.
Dungy said he decided he could give coaching and his family life the "passion" both deserved.
Team president Bill Polian said the 53-year-old Caldwell would be named associate head coach.
But Dungy has often proclaimed he was not an NFL "lifer" and once intended to leave football by age 50. He turned 52 in October and said he considered retiring after each of the past two seasons, including after the 2005 season when his 18-year-old son, James, died.
Dungy's 80 wins in Indianapolis, including the playoffs, are a franchise record, and he ranks fifth in victories among those who coached in 2007 with 136 career wins, which also include playoffs. He enters next season tied for 19th in career wins with Hank Stram.
Before joining Indy, Dungy spent six seasons at Tampa Bay, becoming that team's career-victory leader (54) while turning around one of the league's worst franchises. Dungy led the Bucs to four playoff appearances and the 1999 NFC championship game.
Caldwell has spent the last seven seasons as Dungy's assistant, one year in Tampa Bay and the last six with the Colts. Caldwell's only previous head coaching experience at the pro or college level came during an eight-season tenure at Wake Forest, where he went 26-63 and led the Demon Deacons to a bowl game in 1999.
Caldwell also replaced Dungy for one game late in the 2005 season so Dungy could attend his son's funeral. The Colts lost that game 28-13 at Seattle playing primarily backups.
To Dungy, life was always about more than football. He became a fan favorite in Indy and Tampa, where he was arguably more popular after he left than when he was there.
But it isn't just the fans who like him.
"We love coach Dungy," NFL defensive player of the year Bob Sanders said last week. "We'll let him make the decision, then we'll know and then we'll go from there. But we love him around here."
Copyright 2007 by The Associated Press