The 48-year-old, who led his country to victory in the 1978 World Cup, replaces Renzo Ulivieri, who resigned last week following the club's poor start to the season. Parma lie 11th in Serie A standings with 11 points from nine matches.

Passarella, who has signed a contract until 2003, played for Fiorentina and Inter Milan in the mid-1980s after a long and successful career with River Plate in Argentina. He went on to coach River Plate and Argentina's national side, resigning when they were eliminated from the 1998 World Cup.

He controversially left top striker Gabriel Batistuta out of the team, something he had also done during their days together at River Plate, and famously forced all the players to have a short hair cuts.

Passarella also coached Uruguay, but resigned in February this year when clubs failed to make its players available to him.

Parma were expected to name Carlo Ancelotti as their new coach on Monday before he decided to join AC Milan in place of Fatih Terim.

Other candidates for the Parma job were reported by the Italian media to have included Nevio Scala and Marco Tardelli.