Pellegrini, who had been in charge of Villarreal, will be officially presented today at the Bernabeu.
A statement on the Real Madrid website read: “Real Madrid and Manuel Pellegrini have reached a deal for the Chilean coach to be the first team head coach during the forthcoming season.”
Pellegrini had been widely tipped in the media to be named as the Madrid coach if Perez, as expected, was confirmed as the new club president.
That happened just after midnight on Sunday night following confirmation by Madrid that no other candidate had put themselves forward to stand for the presidency before the May 31 deadline.
The three possible challengers to Perez – Eugenio Martinez Bravo, Juan Onieva and Eduardo Garcia – all pulled out of the running in the last fortnight, with the e57.4million bank guarantee seeming to be the big stumbling block.
That left Perez unopposed to return to the post he held for six highly eventful years until resigning in 2006.
“We want to return Madrid to the place where they should be,” said Perez at a ceremony at the Bernabeu today.
Madrid’s new board of directors also confirmed various other positions had been filled, including Jorge Valdano as director general and presidential aide, Miguel Pardeza as sporting director, and former FIFA World Player of the Year Zinedine Zidane as an advisor.
“It’s an honour and a tremendous responsibility,” added Perez.
“We know what we are getting into and what is expected of us. We are going to work with all our strength,” he added.
The 62-year-old businessman takes over from Vicente Boluda, who has been in the post since Ramon Calderon stepped down in January in the wake of allegations of voting irregularities at the club’s last general assembly in December.