Chelsea have confirmed Portugal boss Luiz Felipe Scolari as their new manager.

The Brazilian was one of the favourites to succeed Avram Grant in the Stamford Bridge hotseat but the timing of his appointment has come as a huge surprise.

Scolari is currently managing Portugal at Euro 2008 and was not expected to make a decision about his future until after the tournament.

Chelsea said in a statement: 'Chelsea Football Club is delighted to confirm that Luiz Felipe Scolari will be the club's new manager from July 1, 2008.

'Felipe has great qualities. He is one of the world's top coaches with a record of success at country and club level, he gets the best out of a talented squad of players and his ambitions and expectations match ours.

'He was the outstanding choice.

'Out of respect for his current role as head coach of the Portuguese national team, and to ensure minimum disruption to this work, there will be no further comment from Chelsea FC nor from Felipe about his new role until his employment with us commences.'

Despite a number of big-name managers being linked with the job following Avram Grant's sacking last month, Scolari was always Chelsea's number one choice and nobody else was offered the position.

He is likely to be unveiled during the first week of July, at which time the details of his contract will also be revealed.

Scolari's appointment comes less than a week after he insisted he would not discuss his future until after Euro 2008.

He said at the time: 'What's going to happen to me after Euro 2008 - if I am going to stay or leave - concerns (only) me and I am not going to talk about it now.

'If I decide to leave or stay, I am only going to make a public declaration at the end of Euro 2008. If something else happens during the Euros, I am not going to answer although things may go this way or that way but I am here to work for the Euros.

'I started working for Portugal in 2004, then I signed up for 2006... I might sign again, I might leave the squad, I don't know.'

Scolari's biggest achievement was leading Brazil to World Cup glory in 2002 and he famously turned down the chance to manage England following Sven-Goran Eriksson's departure in 2006.

The 59-year-old has no experience of managing at club level in Europe.

Before becoming an international manager, he enjoyed success at club level in Brazil, winning South America's equivalent of the Champions League - the Copa Libertadores - with two different clubs.

Portugal star Cristiano Ronaldo could come up against his current coach next season if Manchester United succeed in fending off the interest of Real Madrid but the winger does not begrudge the Brazilian ending his time in international football.

Instead, he respect's Scolari's right to move on - even though his presence is sure to galvanise Chelsea as they seek to put an end to United's two-season hold on the Premier League title.

'He needs to look for his future. I respect that,' said Ronaldo, speaking after tonight's match against the Czech Republic but before Scolari's appointment was announced.

'If he has better conditions, better things for the family and for him, I respect that. 'This is football, it's always like that.

If he goes there it's going to be difficult. If he doesn't go there, another coach will do good work as well.' Former Chelsea midfielder Ray Wilkins described Scolari as 'a manager of top quality'.

He told Sky Sports: 'It appears that he's up for a challenge. He's a big guy, he's charismatic. This will be a breath of fresh air.'

Stamford Bridge legend Ron Harris also welcomed the appointment. 'I think it's a top-class appointment,' he told Sky Sports News. 'They have got a top-class manager.' Harris believes Scolari will introduce free-flowing football to Chelsea.

'When he was manager of Brazil their emphasis was on attacking style - I think he will bring that into Chelsea football club,' he added.

Soccernet, June 11, 2008, 10:23 PM UK

Ancelotti not interested in Chelsea vacancy

Carlo Ancelotti has dismissed any suggestion that he could become Chelsea's new manager.

The AC Milan coach issued an unequivocal statement this evening pledging his loyalty to the Serie A side for the foreseeable future. 'I'm staying at AC Milan for sure, and for many seasons to come,' the Italian said.

'I've not spoken to anyone at Chelsea - any other reports are football talk and pure speculation.' Ancelotti's words followed hot on the heels of Chelsea's own denial of reports that they had made an approach for the double Champions League winner and agreed terms for him to take over.

He was strongly linked with the Stamford Bridge post this afternoon amid suggestions his advisors have reached a settlement with the Blues over a move to England. But both Chelsea and Milan refuted claims that he could be in line to replace the sacked Avram Grant.

'Contrary to reports Chelsea Football Club has not reached agreement with any individual to become manager, nor have we sought permission from any organisation to talk to their manager,' a Chelsea statement read.

'We are extremely happy how our search is progressing.' AC Milan vice president Adriano Galliani, meanwhile, denied Ancelotti met Chelsea owner Roman Abramovich during a visit to Paris yesterday.

The Rossoneri boss was reported to have met the Russian at the Four Seasons hotel in the French capital to discuss terms to take over at the west London club, but Galliani has been assured by Ancelotti the reports are incorrect. 'I have spoken to Ancelotti and can confirm that he was in Paris on Monday, but not to meet Abramovich,' Galliani said.

'That is something he has denied expressively. He was in Paris on his own business. 'Ancelotti is coach of Milan and will continue to be so.' The 48-year-old is under contract with Milan until 2010. The Serie A club are keen to keep hold of the coach despite his lack of silverware this season and him failing to secure Champions League qualification.

New Inter Milan coach Jose Mourinho would not reveal whether he thought Ancelotti would be the right man to take the position he occupied until seven months ago, and insisted his former employer knows what he is doing.

'Ancelotti is a great coach and Chelsea is a big club with great players, but Abramovich has better experience of football at the moment than when he started with Chelsea and I don't think he needs any other opinion,' Mourinho said at his unveiling today.

'I cannot say if Ancelotti wants to move there or not, or whether Milan are open to the offer or closed. 'All I can say is that I support Chelsea and wish the best to whoever does take over.'

Ancelotti has won the Champions League twice with Milan and his European experience is particularly desirable to Chelsea, who lost the final of this year's elite club competition on penalties to Manchester United.

Soccernet, June 3, 2008, 8:06 PM UK