The former Real Madrid boss will take charge of the Blues from July 1 in what is his first managerial role in the Premier League.

Callum McFarlane has been in interim charge since the sacking of Liam Rosenior last month and was on the touchline for Chelsea’s FA Cup final loss to Manchester City on Saturday.

It emerged soon after the 1-0 defeat that Chelsea had reached an agreement in principle with Alonso, who becomes the latest appointment under BlueCo’s ownership.

The 44-year-old Spaniard said on chelseafc.com: “Chelsea is one of the biggest clubs in world football and it fills me with immense pride to become manager of this great club.

“From my conversations with the ownership group and sporting leadership, it is clear we share the same ambition. We want to build a team capable of competing consistently at the highest level and fighting for trophies.

“There is great talent in the squad and huge potential at this football club and it will be my great honour to lead it. Now the focus is on hard work, building the right culture and winning trophies.”

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Chelsea began the season with Enzo Maresca in charge, but he departed in January following tension with the club’s hierarchy, who then turned to Rosenior, only to sack him after just three months.

A group of Chelsea supporters staged a protest outside Wembley on Saturday to voice their dissatisfaction with the owners.

BlueCo will hope that former Liverpool and Real Madrid midfielder Alonso proves to be the man to bring stability to the club, having made a hugely impressive start to his managerial career by guiding Bayer Leverkusen to an unbeaten season in winning the Bundesliga.

That earned him a chance to take charge at the Bernabeu, but it did not prove to be nearly as happy an experience, with Alonso departing in January after only seven months.

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In announcing Alonso’s appointment, Chelsea described him as “one of the most respected figures in the modern game”.

“His appointment reflects the club’s belief in his broad set of experiences, coaching quality and game model, leadership attributes, character and integrity, which were key to the decision to ask him to help lead the next phase of Chelsea’s journey,” read a statement.

“Chelsea Football Club looks forward with confidence to the next phase in collaboration with Xabi, united in the determination to bring success to Stamford Bridge, a hallmark of the club’s history and future.”