The legendary gaffer, who has managed the likes of Chelsea, Real Madrid and AC Milan, takes over from Maurizio Sarri, who was axed just hours earlier.
Ancelotti has been out of work since September after been let go by German giants Bayern Munich.
But the Italian tactician has made a quick return to the top with Napoli, who finished second in this season's Serie A.
The announcement comes just hours after fan favourite Sarri was shown the door after failing to land Napoli's first title since the Diego Maradona era.
Sarri is now expected to take charge at Stamford Bridge when Antonio Conte is sacked by Roman Abramovich.
But Napoli fans are sure to be breathing a sigh of relief after discovering they will be in a safe pair of hands for the new campaign.
Ancelotti is regarded as one of the most successful managers of the modern era, having won trophies in England, France, Germany, Italy and Spain.
SARRI-OUS Maurizio Sarri rejects lucrative deal from Zenit as he waits for Chelsea offer
He has three Champions Leagues to his name, as well as Premier League, Bundesliga, igue 1 and Serie A winners' medals.
Ancelotti had been widely tipped to take the Italian national job, but his resistance to moving away from club work saw Roberto Mancini take that vacancy.
Source: Read Full Article