A method of controlling exhaust braking in an internal combustion engine is disclosed. The engine includes an exhaust system, an exhaust pressure modulation valve, and a variable geometry turbocharger having adjustable vanes. The method includes restricting a flow of the exhaust gas through the exhaust system via a first partially-closed position of the valve. The valve's first partially-closed position increases the exhaust backpressure in the engine up to a first pressure value and generates a first stage of exhaust braking by the engine. The method also includes, following the increase of exhaust backpressure in the engine up to the first pressure value, restricting a flow of the exhaust gas through the turbocharger via closing the turbocharger's adjustable vanes. The closing of the turbocharger's adjustable vanes increases the exhaust backpressure up to a second pressure value in the exhaust system and generates a second stage of exhaust braking by the engine.