Schalke fired coach Jens Keller on Tuesday and replaced him with former Chelsea manager Roberto Di Matteo. Di Matteo signed a three-year contract.
Keller was dismissed after Schalke picked up only eight points in seven Bundesliga games. They are 11th in the 18-team league.
The team lost 2-1 to Hoffenheim on Saturday, and has already been knocked out of the German Cup by third-division Dynamo Dresden.
Keller had been Schalke's coach since December 2012, and took the club twice into the Champions League, but has faced near-constant speculation over his position. General manager Horst Heldt recently complained that the team's lack of consistency was frustrating.
Schalke announced the switch on their Twitter feed but didn't immediately give further details.
Former Italy midfielder Di Matteo led Chelsea to an unexpected Champions League title in 2012, but his reign as manager lasted less than a year. He was fired early in the following season with the club's defense of the European trophy in tatters.
Born in Switzerland, Di Matteo played for Swiss clubs before moving to Lazio in Rome and later to Chelsea.
His coaching career started with Milton Keynes Dons and continued at West Bromwich Albion before he joined Chelsea, first as an assistant in 2011. As head coach at the London club, he won the Champions League in 2012 when Chelsea beat Bayern Munich on penalties in Munich.