The announcement was seen as a severe blow to supervisory board chief Ferdinand Piech, who has ruled the carmaker with an iron fist for more than 20 years.
"The executive committee of the supervisory board asserts that Martin Winterkorn is the best possible chief executive for Volkswagen," the carmaker said in a short statement.
"The executive committee places great importance on the fact that Mr Winterkorn will pursue his role as chief executive with the same vigor and success as before, and that he has the full support of the committee in doing so," the statement said.
The declaration comes in the wake of media reports of a ferocious battle between the 78-year-old Piech and his 67-year-old one-time protege Winterkorn.
Also Read
Piech, a member of the powerful Porsche dynasty that is a shareholder in Volkswagen, and one of the most important figures in German business, sent shockwaves around German industry last weekend by declaring in a magazine interview that he was "distancing himself" from Winterkorn.
Until now, Winterkorn was seen as Piech's close ally and heir apparent and the idea of a poisonous rift between the two ignited fears about the future running of Europe's biggest carmaker, whose empire spans 12 brands and annual sales of 200 billion euros (USD 215 billion).
The steering committee comprises six of the most influential members of VW's 20-strong supervisory board, including the head of the general works committee, the head of the mighty IG Metall metalworkers' union and the head of the regional state of Lower Saxony where the carmaker is based.