Pep Guardiola is to leave Bayern Munich at the end of the season and will be replaced by Carlo Ancelotti.
Guardiola, 44, has been linked with Manchester City, Manchester United, Chelsea and Arsenal.
The former Barcelona coach has won two league titles and the German Cup since joining Bayern in summer 2013.
Ex-Chelsea boss Ancelotti, 56, has been on a break since being sacked by Real Madrid in May 2015 and has signed a three-year deal with Bayern.
The German champions are eight points clear at the top of the Bundesliga and will play Italian club Juventus in the last 16 of the Champions League.
"We are grateful to Pep Guardiola for everything he has given our club since 2013," said Bayern chief executive Karl-Heinz Rummenigge.
"I am convinced that Pep and our team will now work even more intensively towards achieving our major sporting goals - especially as it is now confirmed that Pep is to leave FC Bayern."
Ancelotti has won the Champions League three times, twice with AC Milan and once at Real Madrid, and guided Chelsea to the Premier League title and FA Cup in 2010.
He recently suggested a preference to return to the English top flight but has instead decided to join Bayern.
"I am very honoured," said Ancelotti." I'll be in next season to coach the great FC Bayern."
Rummenigge added: "Carlo is a calm, balanced expert, who knows how to deal with stars and favours a multifaceted style of play - we were looking for this, and we have found it.
"We are looking forward to working with him."
If Ancelotti wins the Bundesliga with Bayern next season, he will become the second coach to have won league titles in four of Europe's top six leagues.
Jose Mourinho has won league titles in Portugal, England, Italy and Spain.
Where next for Guardiola?
The 44-year-old has not revealed where his next destination will be.
Chelsea sacked Mourinho on Thursday and have appointed Guus Hiddink until the end of the season. United boss Louis van Gaal is also under pressure following his side's recent slump in form, which has seen them exit the Champions League at the group stages and lose to Norwich on Saturday.
Guardiola has also been strongly linked with taking over from City boss Manuel Pellegrini in the summer.
Pellegrini's contract has 18 months to run and the Chilean thinks Guardiola might follow him to the Etihad Stadium.
"I hope he will have the option to work at Manchester City," he said. "I say that because I love this club and I hope, in the future, he can work here also.
"Pep Guardiola will work in England, I don't know if it is next season at City or at another club. Some day he'll come here."
How good is Guardiola?
The Spaniard was appointed Barcelona boss in 2008 and became the Spanish club's most successful manager as he led the Catalan club to 13 trophies in his four-year tenure.
He won three league titles, two Champions Leagues and a Copa del Rey while at the Nou Camp.
The former Spain international took a year-long sabbatical before taking over at Bayern Munich on the back of the German club winning the Champions League, Bundesliga and German Cup under Jupp Heynckes.
As well as the league and cup titles, Bayern have also reached the semi-finals of the Champions League in Guardiola's two seasons in charge, with Real Madrid knocking them out in 2013-14 and Barcelona the following season.