The Dutchman's role will be similar to that of many coaches on the Continent. Gullit will concentrate purely on the playing side, while the club's managing director, Colin Hutchinson, will take control of financial matters with regard to transfers and contracts. Gullit's playing contract will be extended until June 1998.
After Hoddle had accepted the post of England coach, Gullit immediately became the logical choice to succeed him at Stamford Bridge. He quickly rejected any suggestion that he would be leaving following Hoddle's departure and his playing colleagues were quick to support the campaign to appoint him as manager.
A free transfer signing from Sampdoria last summer, Gullit was a big success in his first season for Chelsea and was a key factor in Chelsea's switch to a more Continental style of play.
Hutchinson revealed last night that Gullit had been approached last weekend, after Chelsea's final match of the season, and had been given until yesterday to make his decision. Gullit is in the Netherlands this weekend but is expected to return for a news conference.
Hutchinson explained: "I had a chat with Ruud last Sunday briefly and then had another half-hour with him after the tremendous reception he received after last Sunday's match. We went through things with him and then I gave him until today to sort it all out.
"When I knew Glenn was leaving, Ruud was one of the people we immediately thought of and it was a unanimous decision by the board to offer it to him.
"We were concerned that his playing form didn't drop when he takes charge so we have also named Gwyn Williams to help with things like administration at the training ground."
Celtic yesterday unveiled Alan Stubbs as their centre-half of the future, but his pounds 3.5m move from Bolton was almost immediately placed in doubt when the Scottish Football Association announced there would be an investigation into the deal because of the involvement of unlicenced agents.
The problem may arise because of the involvement of Neil and Ian Rioch - brothers of the Arsenal manager, Bruce. They have yet to pay the pounds 100,000 bond to gain a licence to handle transfers. That has caused a storm in the agent's community, many of whom are upset to have paid the cash while others have not.
A complaint was lodged with the SFA, which immediately started a full investigation on behalf of Fifa. If Celtic or Stubbs are found guilty, the penalties could be severe. The maximum fine for a player is pounds 30,000 with a possible year's suspension while the club can be banned from all competitions for a season.
Neil Rioch claimed last night that no wrong-doing had occurred and hoped to be cleared by the inquiry. He said: "I think we are OK. We are licensed under Phil Morrison [a licensed agent] and we would not have done it otherwise or jeopardised Alan's future."
However, the international agents' organisation, Iafa, is lobbying for an example to be made of a big club and a top player. Clare Tomlinson, of the Football Association, said yesterday: "The Riochs are not licensed. There was an application a year ago, but they never followed it up."
Bruce Rioch has been trailing Stubbs for most of the season and is thought to be frustrated at Arsenal's inability to make the signing. However, from the club's point of view, the alleged involvement of the manager's brothers in the transfer, and subsequent investigation, might be a cause of substantial embarrassment.
Stubbs is thought to have favoured a move to Arsenal, and even when he headed to Glasgow on Tuesday there was time for Arsenal to rescue the move, but key figures were abroad and Rioch learned Stubbs had chosen Celtic too late to prevent it.
Following the George Graham affair, Arsenal have opted to greatly reduce their manager's role in transfers, with David Dein, the vice-chairman, taking an active role. Rioch has found this frustrating, and while his contract remains unsigned an air of doubt will continue to hover over north London.
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