Italian soccer has been hit by a match-fixing scandal and hooligan problems in recent years while its top teams were humbled by English sides in last season's Champions League.
Big names such as Chelsea's Frank Lampard, a target for Inter Milan, shunned Serie A and the arrivals of Ronaldinho and David Beckham at AC Milan were greeted with scepticism by some fans and pundits who believe they are past their best.
But charismatic coach Jose Mourinho coming to Inter offered hope Italy would not slip further behind the richer English and Spanish leagues and Kaka staying is another fillip.
"It is an important sign for all Italian football," Italian league president Antonio Matarrese said in a statement.
"Financial resources have not come but an asset has stayed. It is a matter of great prestige which enriches the value of Milan and our league."
Brazil forward Kaka, a quiet and religious man with mesmerising skill, has turned down the world's richest club and reported earnings that have never been seen before in soccer.
City have slightly disputed Milan's and Kaka's version of events, saying they never had a chance to make him an offer, but the 26-year-old could have demanded to leave if he wanted.
City, taken over by the Abu Dhabi United Group last year, offered Kaka increased prosperity but they could not assure him what he craves the most -- trophies and a deep-felt personal attachment to a club.
RECORD OFFER
City are struggling in 11th place in the Premier League and have enjoyed scant success in England, never mind Europe, since the 1970s. Kaka knew it would take a long time for them to challenge for titles.
Milan, who won their seventh European Cup in 2007 thanks to Kaka's brilliance, were bound to consider a world record offer which reports said was about 110 million euros ($143 million).
Kaka has not begrudged Milan for evaluating the offer and giving him the chance to make the final decision. Instead, he has repaid all the faith the club showed in him when taking the promising but unproven youngster from Sao Paulo in 2003.
Some commentators have suggested the whole saga was a big publicity stunt by Milan and owner Silvio Berlusconi, but there is no doubting the emotion Kaka felt at last Saturday's 1-0 home win over Fiorentina in Serie A.
The San Siro was packed with banners asking him to stay and songs hailing the 2007 world and European player of the year reverberated throughout.
Fan demonstrations outside Milan's club offices and Kaka's home also showed him that he would struggle to have the same bond with supporters anywhere else in the world.
Kaka had also witnessed what happened to once-great striker Andriy Shevchenko when he left Milan for Chelsea in similar circumstances in 2006. The Ukrainian had a terrible time in England and came back to Milan half the player he was.
NEW DEAL
Player contracts in soccer can
