Cesare Prandelli has left Fiorentina and signed a four-year contract to take over as Italy boss when Marcello Lippi steps down after the 2010 FIFA World Cup.
Italian Football Federation (FIGC) President Giancarlo Abete was given permission by Fiorentina last week to talk to Prandelli, and the two men met in Rome today to discuss the matter.
"Cesare Prandelli will take over the bench from coach Marcello Lippi after the World Cup in South Africa," read an official statement from the FIGC this afternoon.
"President Abete has confirmed this morning, in a meeting that was held in Rome, the contract with the next coach of the national team, after the decision of Lippi to leave his post.
"The FIGC and Prandelli have agreed a contract for four years. The details of the deal will be defined in the coming days.
"The official presentation of the new coach will be at the end of the World Cup."
Lippi stepped down as Azzurri coach after leading the team to World Cup glory in Germany four years ago, but resumed the role two years ago after Roberto Donadoni was sacked following a poor performance at UEFA Euro 2008.
The 62-year-old will again leave his post after this summer's showpiece event in South Africa, and believes the Federation have got the right man in Prandelli to replace him.
"I told President Abete at Christmas that I intended to finish these two years and then leave," Lippi told reporters at Italy's training camp in the Alpine town of Sestriere, where they are preparing for South Africa'a altitude.
"Prandelli is the right person in the right place, but we will talk about this more in depth in the future. We will also talk further down the line, if you like, of the reasons which have pushed me to leave the national team for the second time."
Prandelli, who was the longest-serving coach in Serie A and had a contract with Fiorentina until June 2011, arrived in 2005 and transformed the Tuscan club from relegation strugglers into a team worthy of qualifying for the UEFA Champions League.
The 52-year-old also had managerial spells with Atalanta, Lecce, Chievo, Venezia, Parma and Roma for a brief spell before leaving to care for his sick wife who later died.
He will be in charge of Italy's UEFA Euro 2012 qualifying campaign where the Azzurri have been drawn in qualifying Group C alongside Serbia, Northern Ireland, Slovenia, Estonia and the Faroe Islands.
They begin their campaign away to Estonia on 3 September.