Real Madrid confirmed Carlo Ancelotti as its new coach on Tuesday after weeks of speculation.
Given a three-year contract, he will be presented on Wednesday.
Ancelotti came from Paris Saint-Germain, where he was replaced on the same day by former France coach Laurent Blanc.
Blanc to coach PSG
Laurent Blanc has been chosen as the new coach of French champion Paris Saint-Germain, clearing the way for Carlo Ancelotti to join Spanish giant Real Madrid at the same time.
Last season, Ancelotti led PSG to its first league title since 1994 but said several weeks ago that he wanted to leave the club after being linked with a move to Madrid.
After reportedly trying to lure the likes of Fabio Capello, Andre Villas-Boas, Rafael Benitez and other high-profile managers, PSG finally opted to give Blanc a two-year contract.
Blanc stepped down from his position as France manager after last year's European Championship.
PSG said in a statement that Blanc "has the mission to build on last season and to continue the club's ascendency towards the summits of the European game."
— The Associated Press
Ancelotti's first task will be to nail down his squad, with striker Gonzalo Higuain likely leaving and the club linked to trying to lure Tottenham winger Gareth Bale after losing a complex bidding war for Neymar to Barcelona.
The former Italian player will also need to resolve three hefty problems inherited from predecessor Jose Mourinho: To find a way to definitely break Barcelona's hold on the Spanish league; win the Champions League after Madrid lost in the semifinals for three straight years; and decide if he gives goalkeeper and captain Iker Casillas back his starting role, or continues to favour newcomer — and Mourinho's preferred keeper — Diego Lopez.
Contracting the 54-year-old Ancelotti brought to a culmination weeks of negotiations between Madrid and PSG. It remains Madrid president Florentino Perez's driving ambition to re-establish his club's reputation after watching bitter rival Barcelona hog the limelight in recent seasons.
Mourinho broke Barcelona's grip on the domestic league for one season, but was unable to win for Madrid an elusive 10th Champions League.
Madrid hailed Ancelotti and said he'd been "elected best coach in all leagues where he has coached: Italy, England and France."
He led Chelsea — the club Mourinho now coaches — to the English Premier League title and FA Cup in 2010, and had his most successful tenure at AC Milan, where he coached it to two Champions League crowns in 2003 and 2007, and the Serie A title in 2004. He coached at Italian clubs Juventus, Parma and Reggiana as well.
Ancelotti also won the European Cup twice as a player for Milan in 1989 and 1990.
Madrid highlighted how its new coach, despite being born to parents who were farmers far removed from the world of football, has ascended to the point where, "you cannot understand football today without Carlo Ancelotti."
Madrid even quoted Arrigo Sacchi, Ancelotti's formative coach and mentor at Parma.
"I taught him to move and it turned out he was faster than anyone thought," Sacchi was quoted as saying. "He was a perfect coach on the field."