Juergen Klinsmann, former manager of the German national team, will take over as head coach of Bundesliga side Bayern Munich from next season.
The German club announced Klinsmann's appointment on Friday, following the decision of Bayern's current coach Ottmar Hitzfeld to step down at the end of the season.
"Former Germany coach will take over the running of the club from July 1," Bayern said in a statement on their official website.
Klinsmann has not held a coaching position since guiding Germany to third place at the 2006 World Cup, resigning immediately after the tournament.
The 43-year-old is well known to Bayern fans from his playing days at the club from 1995 to 1997 when he helped the team win the Uefa Cup and the German league title.
Had spells at clubs including VfB Stuttgart, Inter Milan, Tottenham Hotspur and Bayern Munich in his 23-year playing career.
Won 108 caps for Germany and scored 47 goals. Helped West Germany win the World Cup in 1990 and also won the European Championship in 1996 with unified Germany.
Coached the German national team to an unexpected third place at the 2006 World Cup in Germany before stepping down immediately after the tournament.
Speaks five languages: German, English, Italian, French and Spanish.
Had recently been regarded as a potential candidate as successor to Steve McClaren as England coach, and had also been linked with possible moves to Chelsea and Liverpool.
Klinsmann, who currently resides in California, was widely praised for the way he turned an under-performing Germany team into real contenders for the World Cup.
Meanwhile Bayern, who have been through a rebuilding phase after finishing fourth in the Bundesliga and missing out on the Uefa Champions League last season, will welcome Klinsmann with open arms.
After spending close to $103 million on new players, including French playmaker Franck Ribery and Italian striker Luca Toni, Bayern began the current season well only to see their form slide.
The four-time European champions finished the first half of the season on top of the table, but only lead Werder Bremen on goal difference.
Klinsmann's name had rarely been mentioned as a contender for the Bayern job, with Jose Mourinho, former Chelsea coach, Lothar Matthaeus, former Bayern star, and Dutch pair Marco van Basten and Frank Rijkaard all touted in the German media as possible successors to the veteran Hitzfeld over the past few days.
The Bundesliga is currently on a winter break and matches do not resume until February 1.