Grim took over after John Heitinga was fired in November, and with improved results, the former European champions have decided to leave him in charge until the end of the season.
The 60-year-old Grim lost his first three matches in charge in November, but his side are unbeaten since, winning six of seven subsequent matches and leaving Ajax third in the Dutch league, three points behind second-placed Feyenoord but 16 off runaway leaders PSV Eindhoven.
Ajax will have a new technical director when Jordi Cruyff takes over next month, and he will lead the search for a new club, reports said.
There was no immediate confirmation from Ajax.