Eriksson: 'Extremely excited by the challenge' (GraziaNeri/Allsport)

Swedish coach Eriksson, 52, becomes the first foreign manager to boss the England team. Leading FA figures had insisted that nationality would not be a factor as they searched for the best man to do the job.

Current Lazio assistant manager Tord Grip will take up a position as England's chief scout with immediate effect, and Steve McClaren and Peter Taylor will work alongside Eriksson.

Manchester United's McClaren and Leicester's Taylor will still, as previously announced, take charge of the England side for next month's friendly in Italy. The FA are set to ask them to stay on for another friendly against Spain in February.

Lazio president Sergio Cragnotti this morning revealed that England's new supremo would be leaving the Rome club - which he guided to last season's Serie A title - in the summer.

And just hours later, FA chief executive Adam Crozier announced: 'We are delighted to announce that Sven Goran Eriksson has agreed to be the new England coach.

'He has agreed a five-year contract that will go through to the end of the 2006 World Cup. We've taken our time over the last three weeks to be clear that Sven was our number one priority. He is extremely excited by the challenge.

'Tord Grip will work as chief scout, and he is the only person Sven is bringing in. Otherwise, he will work with Peter Taylor and Steve McClaren and the other young team we have introduced.

'Sven was the unanimous choice of our selection team, and is one of the world's best coaches with an excellent record of sustained success. At no stage did we approach any other manager.

'We are delighted that, in the space of three weeks, we have put together a team of people which we believe has the best possible chance of making England successful in the future.'

And responding to those who questioned whether a foreign coach should have been given the England job, Crozier added: 'We've got to do the right thing for English football. We mustn't kid ourselves about where we are now.'

He added that Eriksson will be living in London full time once he begins work with the England set-up, but declined to name the other two managers on the FA's shortlist of three for the England job.

And he rubbished reports that Eriksson had wanted Nottingham Forest boss David Platt as his assistant, branding them 'erroneous'.

Although Eriksson's contract begins on July 1, 2000, FA officials hope to negotiate his availability for the World Cup qualifiers in March and June.

But they could yet ask Taylor and McClaren to stay on until the summer after Lazio insisted that their manager - who president Cragnotti said was 'full of pride at becoming the first foreign manager of the England team' - would not be available to England before then.

Club spokesman Guido Paglia said: 'Any speculation that Eriksson will leave before then is just unfounded rumour.'

Eriksson's appointment has been welcomed by former England skipper Terry Butcher, who said: 'I'm very glad - this is good for English football.

'The right structure is in place, and the FA have acted very wisely in appointing Eriksson and people to come through.'

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