Chelsea owner Roman Abramovich lost out in the race for Pep Guardiola after it was announced that the Spaniard would become Bayern Munich coach from the summer.
The 41-year-old former Barcelona coach has penned a three-year deal and will take over in July.
Revealing the news on their official Twitter account, Bayern said: "Jupp Heynckes [current manager] will finish his successful career by the end of this season.
"Pep Guardiola will take over as FC Bayern head coach in July."
The Spaniard confirmed last week that he was looking to return to the game, sparking renewed competition for the services of the man who steered Barcelona to 14 trophies in four seasons.
The news will disappoint Abramovich, who had hoped to lure Guardiola to Stamford Bridge and was looking to offer a salary worth £15million a year to convince him to move to west London.
However, Bayern recently emerged as favourites to capture Guardiola's services and confirmed this afternoon they had got their man.
Guardiola replaced Frank Rijkaard at Barca in 2008 and during his four years at the Nou Camp he led the Catalan giants to 13 trophies, making him the most successful coach in the club's history.
Bayern chief executive Karl-Heinz Rummenigge said: "Pep Guardiola is one of the most successful coaches in the world and we are sure that he can make not just Bayern, but all of German football shine."
