Ancelotti was widely reported as the front-runner to replace Jose Mourinho, who has returned to manage Ancelotti's former club Chelsea, at the Bernabeu despite being under contract with French champions Paris Saint-Germain.

Real have not confirmed the length of contract handed to Ancelotti, or if any compensation has been paid to PSG, but a statement published on the club's website read: "Carlo Ancelotti will coach Real Madrid next season.

"The Italian has experienced success in every country where he has managed and arrives in the Spanish capital after being named coach of the season in France."

Meanwhile, Ancelotti's former club confirmed: "Paris Saint-Germain is delighted to announce the appointment of Laurent Blanc as coach for the next two years.

"He will take charge of the squad on July 1, 2013, for the start of preseason training."

Blanc managed Bordeaux before taking charge of France for two years until the end of Euro 2012.

It was later confirmed that Ancelotti has been handed a three-year contract at the Bernabeu, with the signing to be formalised in the stadium's royal box at 1200 BST tomorrow before he holds his first press conference.

Former France manager Laurent Blanc, meanwhile, replaces the Italian at the Parc des Princes on a two-year deal.

A two-time Champions League winner with AC Milan, Ancelotti has won domestic league titles in three different countries during spells with the Rossoneri, Chelsea and PSG.