The 51-year-old Argentine had been widely expected to take the Chelsea job, which is considered one of the most high-profile positions in European football.
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Mauricio Pochettino has signed a two-year contract to become the new manager of Chelsea Football Club.
Starting on 1 July, the Argentine coach will be tasked with getting a tune out of an expensively assembled squad that finished 12th in this season's Premier League.
Pochettino is no stranger to London after having a five-and-a-year spell with North London side Tottenham Hotspur. It will be his first coaching role since last July, when he left Paris Saint-Germain.
Pochettino had been widely expected to take the Chelsea job, which is considered one of the most high-profile positions in European football.
"Mauricio’s experience, standards of excellence, leadership qualities and character will serve Chelsea Football Club well as we move forward," Chelsea said on its website.
He is the permanent successor to Graham Potter, who was fired in March after nearly seven months in charge. Frank Lampard has led the team on an interim basis since then.
Chelsea in arrears
It's been one of Chelsea's worst seasons ever in the Premier League. It was the first time the club finished in the second half of the table in 27 years.
The London club recorded 11 league wins, only mustered up 38 league goals and failed to qualify for European football.
The team spent €690 million on players last year, however, they failed to turn that investment into success on the pitch, much to the dislike of new US owner Tim Boehly.