Chelsea name Scolari as new £6.25m pa manager

Chelsea have appointed Luiz Felipe Scolari as their new manager and will pay the Brazilian an astonishing £6.25m-a-season over the next three years in what is one of the biggest deals ever agreed in world football.

The announcement caused consternation in Portugal, where Scolari is the coach of the national team who yesterday beat the Czech Republic 3-1 in their quest to win the European Championships.

At first Scolari's advisers, wrong-footed by the suddenness of the announcement, denied that a deal had been struck with Chelsea. They even claimed he would renege on any offer if it was made public, as he once did when Benfica named him as their coach, but they were embarrassingly forced to back-track after the Premier League club made an unequivocal announcement on their web-site.

Even so Scolari has not yet signed a contract. His negotiations are being handled by the agent Jorge Mendes, who has developed into one of the most powerful men in football and who, ironically, also represents Jose Mourinho who was sacked by Chelsea last year. Mendes was still talking to Chelsea last night as to whether Scolari would sign a two or three-year deal but the likelihood was that he would agree the longer contract. What was certain, however, was that he will be the next Chelsea manager.

The Independent, which maintained that Scolari was always the frontrunner for the post, revealed on 29 May that he had been contacted by Chelsea and was the favourite to succeed Avram Grant who was sacked after an unhappy eight months in charge following Jose Mourinho's dismissal.

Indeed The Independent contacted Scolari the day after Grant was sacked to ask whether he would be interested in the Chelsea post. He said he would – but didn't want his interest to be made public. He also said he would be comfortable with the conditions set down by the club owner Roman Abramovich who has made clear that he wants a disciplinarian coach but also one who is willing to discuss team matters and selection with him.

Scolari was excited by the prospect of taking over but did not quite believe that Chelsea wanted him. No-one else was offered the job.

The deal to hire Scolari was struck in Geneva on Tuesday evening when Scolari met Frank Arnesen, Chelsea's head of youth development and chief scout, and the main power broker at the club, and Pier De Visser, the 73-year-old Dutchman who holds the unofficial title as Abramovich's scout.

Abramovich himself was in Geneva yesterday and had lunch with his advisers before travelling to watch the Portuguese play at the Stade de Geneve. The win means they qualify for the last eight of the competition and the impressive way they have performed so far has also helped Scolari's cause. Scolari will take over at Stamford Bridge as from 1 July with his contract with the Portuguese Football Federation set to expire –on 29 June – after this tournament finishes.

In a statement Chelsea said: "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 and to ensure minimum disruption to this work there will be no further comment from Chelsea nor from Felipe about his new role until his employment with us commences."

Scolari, who won the World Cup with Brazil in 2002 before leading Portugal to the final of Euro 2004, was set to become England manager in 2006 but changed his mind at the last moment. The 59-year-old freely admits that part of his motivation for accepting Chelsea's offer is the contract he has been given.