Laurent Blanc will take over as France coach following the World Cup after the French Football Federation reached an agreement with Bordeaux.
Blanc informed the Ligue 1 club earlier in the week that he was keen to accept the offer to coach the national side, but the deal was delayed while a compensation package was negotiated.
But Les Girondins have now accepted the terms on offer from the FFF to allow the former Manchester United defender to be appointed.
Former France defender Blanc captained Les Bleus to World Cup glory in 1998 and helped them claim further success at Euro 2000.
The 44-year-old will replace Domenech, who will step down following the conclusion of this summer's showpiece tournament in South Africa.
Blanc guided Bordeaux to the quarter-finals of this season's UEFA Champions League, where they were beaten by Ligue 1 rivals Lyon.
The previous season he had ended their 10-year wait for the French title and looked set for a successful defence when Bordeaux held a nine-point lead at the winter break, only to suffer a late slump to finish in sixth.
A statement released by the federation and Bordeaux on Thursday morning read: "The French Football Federation, its president, Jean-Pierre Escalettes and Bordeaux FC, its president and shareholder, have reached an agreement for the recruitment of Laurent Blanc as the coach of the France football team."