Les Blues were heavy favorites to add a European title to their World Cup victory in Russia in 2018, but they were eliminated in the last-16 due to growing tensions within the squad.
After defeating Germany 1-0 in Munich, France finished the group stage with frustrating draws against Hungary and Portugal.
They then failed to win their first knockout game of the tournament, losing on penalties to Switzerland in the last-16.
In the aftermath, Deschamps, France's longest-serving manager, was heavily criticized by the French press, and reports suggested that his former international teammate Zinedine Zidane was in the running to replace him after he left Real Madrid.
However, French Football Federation president Noel Le Graet has revealed that Deschamps' future has been resolved following a meeting on Wednesday.
'It was sorted in three minutes,' he told Le Figaro.
Deschamps will now serve out the remainder of his contract, which is set to expire in December 2022, following France's attempt to defend their World Cup title in Qatar.
Le Graet has been a staunch supporter of Deschamps since he took over from Laurent Blanc as manager of Les Bleus in 2012.
Deschamps said before the tournament that he was open to extending his contract, and that he had agreed to new terms as recently as December 2019 to take him until after the next World Cup.
'With the agreement of my president, I may continue after 2022,' Deschamps told RTL in June.
'People have to want to keep me, and you need results for that.' I'll do something else at some point, but for the time being, I'm enjoying my job as a manager.
'I have a contract until December 2022, but I am not considering becoming a club coach right now.' I am overjoyed because all of the requirements have been met.'
Tensions appeared to reach a boiling point within the French camp in the days leading up to their defeat by Switzerland, raising questions about whether Deschamps was the right man to lead them forward.
Paul Pogba, Raphael Varane, and Benjamin Pavard were seen arguing during the last-16 match due to Manchester United midfielder Paul Pogba's lack of defensive effort.
Pogba had scored a superb long-range strike to put France 3-1 up against the Swiss, but Benjamin Pavard expressed his displeasure with his work-rate, and the defender quickly informed his team-mate.
'Benj (Pavard) thinks you don't defend enough,' Varane is said to have told Pogba, according to Le Parisien.
Pogba then retaliated, reportedly enraged by the criticism, and confronted Pavard, asking, 'What did you say?'
The outlet goes on to say that Pavard followed up with several insults during the argument, and that the apparent discord in the group was a factor in their collapse and shock exit.
Pogba is also said to have apologized to Varane in the locker room following the game, but several players' relationships appear to be fraying.
Kylian Mbappe and Antoine Griezmann, in particular, are said to have been 'far from friendly' with each other, according to reports in France.
The decisive spot kick was saved by Paris Saint-Germain forward Kylian Mbappe, who has been at the center of the storm. Senior players are said to have been irritated by his 'sulking' in recent weeks.
L'Equipe was the first to point out the schism between Mbappe and Griezmann, adding that the former grew 'jealous' of the Barcelona forward's position in the squad.
With Mbappe unable to control his emotions, Steve Mandanda, Hugo Lloris, and Moussa Sissoko - a number of France's more experienced heads at the showpiece - grew tired of the antics.
It was also revealed that Adrien Rabiot's mother, Veronique, had argued with the relatives of her son's team-mates in the stands after their elimination.
Veronique attempted to defend the midfielder, for whom she also works as an agent, and reportedly advised Mbappe's father to'reframe his son and make him less arrogant.'
According to reports, a 'heated exchange' ensued between Veronique and Mbappe's parents, leaving the families of the other players'shocked' by the outburst.
She is also said to have vented her rage at Pogba's family, questioning why he squandered possession so cheaply before Switzerland broke away to score and send the match to extra time.