Chelsea have confirmed the appointment of Andre Villas-Boas on a three-year deal.
The Blues have been locked in talks with Villas-Boas after his £13.3million release clause from Porto was activated on Monday.
It had appeared Dutchman Guus Hiddink - who enjoyed a successful spell as caretaker boss at Chelsea in 2008-09 and continues to enjoy a close relationship with owner Roman Abramovich - was set to return to Stamford Bridge once his exit from the Turkish Football Federation was agreed, with compensation set at around £4million.
However, that scenario, whether as sporting director or first-team manager, never materialised, with Chelsea focused instead on appointing an up-and-coming coach following the dismissal of Carlo Ancelotti, the Italian unceremoniously axed at the end of last season just 12 months after guiding the club to a league and FA Cup double.
Villas-Boas, 33, certainly fits the bill after guiding Porto to domestic and Europa League success last season. He is also no stranger to the west London club, working there under as part of the backroom staff under Jose Mourinho, whom he followed to Inter Milan.
Now Chelsea have wasted little time in securing the deal and they were delighted to confirm his appointment in a statement released on the club's official website.
It read: "Chelsea Football Club is delighted to announce that Andre Villas-Boas will be the club's new manager.
"He has signed a three-year contract and will start work immediately.
"Andre was the outstanding candidate for the job. He is one of the most talented young managers in football today and has already achieved much in a relatively short space of time.
"His ambition, drive and determination matches that of Chelsea and we are confident Andre's leadership of the team will result in greater successes in major domestic and European competitions.
"Andre will bring his coaching experience back to a club he is already very familiar with, having previously worked here for three years.
"He has always been highly regarded at Chelsea and everyone here looks forward to welcoming him back and working with him."
One of his first moves as the new Blues boss could be to sign Porto's star striker Falcao, the £25million-rated Colombian having impressed as the Dragons won the Europa League final at Dublin's Aviva Stadium, where the 25-year-old netted the only goal against Braga.
However, at just 33 Villas-Boas will be the youngest manager in the Premier League and must quickly integrate himself back into the Stamford Bridge dressing room, but this time as the boss.
Villas-Boas tendered his resignation with Porto on Tuesday, with Tuesday night's confirmation of the receipt of the compensation payment - reported to be 15million euros - paving the way for him to move on to a new club, with Chelsea swiftly acknowledging their official interest.
All that was left was for Villas-Boas to agree the formalities of a lucrative £4.4million a year salary on his return to Stamford Bridge, but this time as the man charged with delivering the Champions League trophy.
Porto confirmed in a statement to the Portuguese Securities Market Commission that the full buy-out clause had been met by Villas-Boas himself - although it is likely to have come via the deep pockets of Abramovich, who has already spent millions in cutting short contracts of previous managers and players.
How will Chelsea fare under Andre Villas-Boas in 2011/12?
Sweep the board
Win multiple trophies
Claim one piece of silverware