The Kennedy Center announced yesterday that Michael M. Kaiser will continue as its president until the end of 2011.

The extension of his contract was revealed at a luncheon yesterday by Chairman Stephen A. Schwarzman. A number of artistic and financial improvements at the center "could not have taken place without Michael Kaiser," he said. "He is one of the most outstanding people in the arts world."

When Schwarzman announced that Kaiser would be staying almost six years beyond the January 2006 expiration date of his original contract, the 150 guests yelled and cheered and then gave Kaiser a long, standing ovation.

"This is truly the best job one could have in the world," said Kaiser. "In the world, not just the arts world."

The contract makes him one of the highest-paid arts administrators in the country, he said, though he declined to reveal his salary. General managers of the country's largest arts organizations, such as the Metropolitan Opera, can earn up to $1 million a year.

Part of the reason he is staying, Kaiser said, was the chance to "do important and interesting work" and to oversee the physical expansion of the center, a $650 million proposal that has White House approval.

Since Kaiser was appointed president in January 2001, the center has become a lively national destination for dance, theater and music, not just a formidable presence on the Potomac River. His tenure has marked a return to self-produced theater, answering some of the critics who thought the Kennedy Center had become staid and merely a stopping point for road shows.

"The center is growing and thriving under Michael," said Alma Johnson Powell, vice chairman of the center's board, who attended yesterday's announcement. Board member James V. Kimsey, the co-founder of America Online, said Kaiser's early contract renewal "is an enormous source of comfort. He energizes people to do their best. He's a genius at this."

Looking back at the center's programming, Kaiser said he wanted to disprove the notion that the center was a "good regional theater" and show quality work that could rival that of any arts group. "Some of the things that were being said about the center were real and some of it was perception. We had to do more work that spoke to people outside Washington," he said. The center is still going to bring in traveling tours, though; this summer's stop for "The Producers" brought in $11 million in ticket sales.

The most successful example of Kaiser's formula of developing a performance series around one theme was that for composer Stephen Sondheim in 2002. New productions of six plays received international notices. Earlier this year, revivals of three Tennessee Williams plays also brought top-notch talent and a sizable audience. The Williams festival, said Kaiser, also came in $200,000 under budget.

In addition to increased marketing, Kaiser said his goal was to assemble work with a strong point of view. "With Sondheim, we had to convey to the public a point of view we had about his work -- that they were accessible. We did it in repertoire, so putting them next to one another showed that," he said. "With Williams, we thought people had stale notions about him. We wanted people to see the beauty of the language."

He signed the Kirov Ballet to a 10-year annual engagement and booked the Royal Shakespeare Company for five years of appearances. He was instrumental in solving orchestra union issues that allowed the New York City Ballet to return after a 17-year absence, and has added two weeks to the general ballet schedule. The center has also organized a Tchaikovsky festival and a French festival, helped revitalize the National Symphony Orchestra with better-known guest conductors and has helped nurture the Suzanne Farrell Ballet. Next year the Kennedy Center will produce a full-length version of the George Balanchine ballet "Don Quixote," which has not been done in two decades. It will also produce the Joshua Logan play "Mister Roberts" as part of a 1940s retrospective.

"Michael has taken us from good to great," said attorney Robert B. Barnett, an outgoing member of the board.

Kaiser had been mentioned as a candidate for the opening at the Metropolitan Opera. "He has a great canvas to work on. He was competed for but he made a pragmatic decision that he has support here," said Kennedy Center board member Thomas E. Wheeler, a telecommunications executive.

The center has an operating budget of $134.9 million, an increase from $110 million in 2000. The Kennedy Center has also visibly improved its physical appearance during Kaiser's tenure, with the completed renovation of the Opera House, the center's restaurants and parking, and two new plazas on top of the garage extensions. Next year it will convert the old American Film Institute space into a family theater. The Eisenhower Theater is slated for a redo in four years.

The largest project being planned is an eight-acre expansion of the front plaza over the existing highway and the construction of two buildings on the site. The project is waiting for government funding for the first stage. The center has raised about $150 million for the new buildings.

Financially, said Schwarzman, the center is on good footing. "It is not often you find an arts organization in such good shape," said Schwarzman, a New York investment banker who took over the chairmanship in May. In the past four years, donations to the center increased about 30 percent to the past year's $47. 6 million, while ticket revenues jumped 24 percent from $36.6 million to $45.2 million, according to the center.

Kaiser said he has cut $6 million in annual administrative expenditures. "We are miserly about everything that is not onstage," he said.

The contract extension would make the Kennedy Center job the longest post Kaiser has held at an arts organization. He built a reputation as a "turnaround king," taking on American Ballet Theatre, the Alvin Ailey Dance Company and the Royal Opera House in London, when their management and finances were in disarray.

Kaiser said simply he likes the work. "Arts management is a difficult thing. What makes the job challenging is pulling all the strands together. My goal has not been to do more and more but to do it better and better."

Kennedy Center President Michael Kaiser: "The best job one could have.""My goal has not been to do more and more but to do it better and better," says Michael Kaiser, right, here with expansion architect Rafael Vinoly.