Athletic Bilbao have promoted Jose Angel "Cuco" Ziganda to head coach following the departure of Ernesto Valverde.
Ziganda has been in charge of the club's reserves since 2011 and was considered the leading candidate to replace Valverde, a reported target for Barcelona.
A club statement said: "Jose Angel Ziganda will be the new coach of Athletic Club for the next two seasons."
Ziganda, 50, played for Athletic for seven seasons before returning to hometown club Osasuna and going on to coach them from May 2006 until October 2008.
He said: "I'm thrilled and very grateful to the club for granting me this opportunity. I'm excited and cannot wait to get started.
▶ VÍDEO: José Ángel Ziganda, nuevo entrenador del Athletic Club #athletichttps://t.co/Z3pfmxFMfx
- Athletic Club (@AthleticClub) 24 May 2017
"I identify so much with this club -- I could not have had better news. I consider myself the ideal person [for the job] because I know the club, the players, what the fans want.
"We have a strong team and we can do great things."
At a news conference on Wednesday, Valverde spoke highly of Ziganda and said: "I have great appreciation for him not just from a professional standpoint but also from a personal one.
"I've seen Ziganda work at the club and I've benefited from the work he has done with the players that were promoted to the first team."