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"I am looking forward to the next three years, which should be among the best of my career at Birmingham in the Premier League," Purse told the club's official website.
"Football is a very short career and it was a case of looking after me and my family.
"A lot of fans have told me they understand my situation, some have accused me of trying to 'rob' the club.
"Ever since all this started I've done my best to block everything out and concentrate on my football, which hasn't been easy.
"One thing I've said all along is that I never wanted to leave, by coming to an agreement it shows that."
Purse had been linked through the media with Charlton, Everton and even arch rivals Villa were said to be interested.
"I heard nothing from anyone," he said. "I read the papers and saw that this club and that were interested, but I didn't take any notice of it.
I wanted to get my contract sorted here."