Ruben Amorim will lead AC Milan's bid to return to the Champions League after taking charge of the ailing seven-time European champions on Monday.
Italian media report that Amorim will be paid a net annual salary of 3.5 million euros ($4.06 million) over his two-year deal as he bids to improve the fortunes of one of Europe's most storied clubs.
"There are ambitions that stay with you throughout your career, and coaching AC Milan has always been one of mine," Amorim said.
"I know exactly what this club means: history, prestige and an extraordinary fanbase around the world."
Portuguese Amorim returns to coaching six months after being sacked by Manchester United with a year-and-a-half left on his contract, a move which cost the Premier League giants £16.7 million ($22.4 million).
He had attracted attention as a bright young coach at Sporting Lisbon, but he failed to make an impact at Old Trafford, and it was left to his replacement, Michael Carrick, to drag United into next season's Champions League.
The 41-year-old will be tasked with a top-four finish in Serie A next season after Milan missed out on Europe's top club competition on the final day of this past campaign.
Milan slumped to a shock 2-1 home defeat by lowly Cagliari and ended up fifth behind both Roma and wealthy upstarts Como, who took the final two Champions League spots.
That result, which was preceded and followed by loud supporter protests against American owners RedBird, led to the sacking of coach Massimiliano Allegri, CEO Giorgio Furlani and the club's sporting directors Igli Tare and Geoffrey Moncada.
Allegri is widely reported to be taking over at Napoli in the coming days following the departure of Antonio Conte.