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David Beckham has signed a £20 million deal to become the new global ambassador of fashion house Giorgio Armani.

The LA Galaxy star will front a new underwear campaign in a series of billboard and fashion magazine adverts from the start of next year.

The three-year deal, in which Beckham, 32, will receive an annual fee plus royalties, is unprecedented for any sportsman and will cement his status as the world's best paid footballer.

It is Beckham's first formal clothing contract and part of an overall strategy by his management company 19 Entertainment to maximise his earnings during the final few years of his playing career.

The campaign for the Emporio Armani SS08; underwear range is thought to have been sanctioned by Giorgio Armani. The 73-year-old Italian designer has become friends with Beckham and his wife, Victoria, dining with them several times since their move to California.

A source close to the deal said: "The personal relationship was definitely instrumental in this deal. David and Giorgio get on very well so it was very much Giorgio's personal choice. But Armani also see this as a sound business decision - few individuals have a truly global reach that can match David's."

The Armani deal came about after the former England captain's contracts with Vodafone and Gillette both came to an end this year.

According to accounts filed at Companies House, Beckham's earnings from endorsements fell last year for the second year running, by 28 per cent to £11.1million, leaving his management company looking for new endorsements. They were keen to prove that Beckham's marketing clout was as strong as ever in spite of a string of injuries and a poor year for LA Galaxy.

Beckham still has deals running with Adidas, Pepsi, Motorola and perfume maker Coty - which produces fragrances named after him and Victoria - and earns £500,000 a week from his playing contract.

His representatives, who are now only interested in deals in which Beckham receives a share of product sales on top of his annual sponsorship income, are also close to securing a tie-up with aUS brand for a campaign that will only appear in America.

The Armani adverts, described by one source as "stylish and sexy", were shot last Friday in LA by photographers Mert Alas and Marcus Piggott.