Madrid:Real Madrid confirmed on Monday that Manuel Pellegrini will coach the club next season, Florentino Perez's first signing since assuming the presidency of the Spanish powerhouse.
Madrid said on its Web site on that the 55-year-old Chilean had agreed to leave Villarreal after five seasons to lead the 31-time champion.
Perez will present Pellegrini to the media on Tuesday. Terms of the contract were not released and Madrid did not say if the deal stretched beyond 2010.
Villareal had said previously that any Spanish club looking to employ Pellegrini would have to buy out his contract worth euro 4 million ($5.7 million).
Pellegrini will replace Juande Ramos, who took over at Madrid in December after Bernd Schuster was fired. Madrid finished second to arch rival Barcelona this season after winning back-to-back league titles in the previous two seasons.
Pellegrini transformed Villarreal after arriving from River Plate in 2004.
The Chilean's fluid style of attacking football often compared to Arsene Wenger's Arsenal got Villarreal into the Champions League twice during his five-years in charge, including a run to the semifinals in 2006. Villarreal finished fifth in La Liga this season.
Pellegrini's arrival comes hours after Perez assumed the presidency of Real Madrid for the second time. Perez replaced Vicente Boluda after no other candidates came forward.
Perez presided over Madrid from 2000 to 2006, the so called 'galactico' era, when he turned the club into a star-studded global marketing giant featuring Zinedine Zidane, David Beckham and Ronaldo.
"Madrid has to drop the doubts and reach those heights where it's meant to be," Perez said. "We want to return Madrid to where it belongs."
Zidane returned on Monday as a special adviser to Perez, while former Madrid coach Jorge Valdano, who was sport director during Perez's previous term, is working alongside Zidane and as club director.
Miguel Pardeza replaces sporting director Pedja Mijatovic who resigned earlier this month.
Madrid, a record nine-time European champion, was knocked out of the Champions League in the first knockout stage for the fifth straight season and went on to finish second in La Liga to Barcelona, which became the first Spanish club to win three major trophies in one season.
"We need to recover the values that turned (Madrid) into a legend," said Perez during his address from the Santiago Bernabeu stadium. "Our club is entwined in the history of football."
AC Milan's Kaka has been heavily linked to Perez, with Spanish media reporting that the Brazilian star could be presented on Thursday. Manchester United's Cristiano Ronaldo has also been a Madrid target since 2006, when Ramon Calderon won the presidency after Perez quit.
Calderon resigned in January amid a vote-rigging scandal that is currently being probed by a Madrid court.