"From the outset I said I would take my time because this is a very important decision," said chairman Sir John Madejski. "I have always had great faith in Brian, I've always known his qualities and his period in charge simply reaffirmed what I already knew.
"It was important to give him an opportunity and he has taken it with both hands. He has managed the team very well during a difficult period and this decision is based on the entirety of his work, both as first team manager and in his previous roles during his ten years here.
"We have reaffirmed our commitment to him with this contract and we are determined to pull together as a club with Brian at the helm. I am sure the fans will show their full support for our new manager and I know we are all fighting towards a common goal."
McDermott added: "I am delighted to have been appointed manager of a club that is very dear to my heart, and I would like to thank the chairman. We have an excellent relationship going back a number of years."
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