The relegated London outfit were expected to sell Austin, 26, this summer.
They set a £15m price tag on the striker's head, which appears to have dissuaded a host of suitors from bidding for the player.
Austin scored 18 goals in the Premier League last season and attracted interest from Newcastle, West Ham and West Brom during the transfer window.
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Butterfield has previously had stints at Norwich City, Bolton, Crystal Palace and Middlesbrough.
The 25-year-old signed a four-year contract at Pride Park and said: “I started my career down at Barnsley and had a good time there, received a lot of plaudits, earned a move to the Premier League, but my knee injury really set me back two or three years in my career.
“It took me two years to really get over that and get some sort of form back and some rhythm in my play.
“That came last year at Huddersfield and I really produced the kind of performances that I had done before that injury.
“Last year was, personally, a very good one for me, I enjoyed it at Huddersfield, but I felt that this was the right opportunity for me at this stage.
“It’s taken two or three weeks to get this deal over the line from the start of the process when Derby showed an interest.
The Bluebirds are keen on retaining their 24-year-old striker for the season, despite promotion rivals Wolves making their interest known this summer.
It was understood another bid would be lodged on deadline day. But the BBC report that Cardiff's resolve has remained strong, while they also fend off a West Brom offer for goalkeeper David Marshall.
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Michail Antonio (left) is reportedly on his way to West Ham after Forest agreed a fee